Originally Posted by
ThumbsUp
If it’s like Delta’s, it’s not back pay, but current year earnings, so taxable for the year in which it is paid and only eligible as elective contribution like any other pay.
The only thing you have to factor in is that the 2023 portion of the signing bonus is pensionable. So, if you normally plan on a certain amount to meet the 415c limit, you will have to make an adjustment.
i guess that will be in the language details. Retro payments are almost always taxable in the current year but if any pensionable amounts are allowed, the IRS requires that those funds be allocated based on the years for which they’re they based on. If no pensionable amounts for 20,21,22 then it’s a non issue