Section 457(b) Last 3-Year Catch-Up

§ 457. Deferred compensation plans of State and local governments and tax-exempt organizations(a) Year of inclusion in gross income(1) In generalAny amount of compensation deferred under an eligible deferred compensation plan, and any income attributable to the amounts so deferred, shall be includible in gross income only for the taxable year in which such compensation or other income—(A) is paid to the participant or other beneficiary, in the case of a plan of an eligible employer described in subsection (e)(1)(A), and (B) is paid or otherwise made available to the participant or other beneficiary, in the case of a plan of an eligible employer described in subsection (e)(1)(B). (2) Special rule for rollover amountsTo the extent provided in section 72(t)(9), section 72(t) shall apply to any amount includible in gross income under this subsection. (3) Special rule for health and long-term care insuranceIn the case of a plan of an eligible employer described in subsection (e)(1)(A), to the extent provided in section 402(l), paragraph (1) shall not apply to amounts otherwise includible in gross income under this subsection. (b) Eligible deferred compensation plan definedFor purposes of this section, the term “eligible deferred compensation plan” means a plan established and maintained by an eligible employer—(1) in which only individuals who perform service for the employer may be participants, (2) which provides that (except as provided in paragraph (3)) the maximum amount which may be deferred under the plan for the taxable year (other than rollover amounts) shall not exceed the lesser of—(A) the applicable dollar amount, or (B) 100 percent of the participant’s includible compensation, (3) which may provide that, for 1 or more of the participant’s last 3 taxable years ending before he attains normal retirement age under the plan, the ceiling set forth in paragraph (2) shall be the lesser of—(A) twice the dollar amount in effect under subsection (b)(2)(A), or (B) the sum of—(i) the plan ceiling established for purposes of paragraph (2) for the taxable year (determined without regard to this paragraph), plus (ii) so much of the plan ceiling established for purposes of paragraph (2) for taxable years before the taxable year as has not previously been used under paragraph (2) or this paragraph, (4) which provides that compensation—(A) in the case of an eligible employer described in subsection (e)(1)(A), will be deferred only if an agreement providing for such deferral has been entered into before the compensation is currently available to the individual, and (B) in any other case, will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month, (5) which meets the distribution requirements of subsection (d), and (6) except as provided in subsection (g), which provides that—(A) all amounts of compensation deferred under the plan,