Printable Form 2026

IRS Publication 4484 – IRS Forms, Instructions, Pubs 2026

IRS Publication 4484 – IRS Forms, Instructions, Pubs 2026 – In today’s competitive job market, offering robust retirement benefits is essential for tax-exempt government entities like schools, hospitals, churches, and charities to attract and retain top talent. IRS Publication 4484, titled “Choose a Retirement Plan for Employees of Tax-Exempt Government Entities,” provides a comprehensive roadmap for employers navigating these options. This guide breaks down the key features of various retirement plans, helping organizations make informed decisions while maximizing tax advantages. With retirement savings being a top priority—studies show that workers aged 25-64 need 70-90% of their pre-retirement income to maintain their lifestyle—this publication is a vital resource for nonprofits and public sector employers.

As of February 2026, while the core structure of Publication 4484 remains based on its April 2021 revision, annual cost-of-living adjustments have updated contribution limits and other thresholds. This article incorporates the latest 2026 figures from IRS announcements to ensure accuracy and relevance for tax-exempt entities planning ahead.

Why Offer a Retirement Plan? Key Advantages for Tax-Exempt Employers

Starting a retirement plan isn’t just about employee benefits—it’s a strategic move for tax-exempt government entities. According to IRS guidelines, these plans help employees save for the future, boost organizational appeal in hiring, and provide significant tax perks. For instance:

  • Tax Benefits: Contributions often reduce taxable income, with investments growing tax-free until withdrawal. Employers may qualify for the Retirement Savings Contributions Credit, worth up to 50% of eligible contributions (up to certain limits).
  • Employee Retention: Over half of U.S. workers participate in employer-sponsored plans, making them a key factor in job satisfaction.
  • Catch-Up Opportunities: Employees aged 50+ can make additional contributions, with enhanced options for those aged 60-63 in 2026.
  • Ease of Setup: Many plans require minimal administrative effort, ideal for resource-constrained nonprofits and government bodies.

For small employers (100 or fewer employees), tax credits up to $5,000 per year for the first three years can offset setup costs. Additionally, plans must comply with rules like nondiscrimination testing to avoid favoring highly compensated employees, though some options for tax-exempt entities have simplified requirements.

Types of Retirement Plans for Tax-Exempt Government Entities

Publication 4484 outlines eight primary plans tailored for tax-exempt and government employers, including IRA-based options, defined contribution plans, and defined benefit plans. Below is a breakdown with 2026 contribution limits, eligibility, and features. Note that all plans allow for tax-deferred growth, and distributions generally begin by April 1 following age 73 (or later under recent SECURE Act changes for those born after 1959).

1. Payroll Deduction IRA

  • Best For: Any tax-exempt employer seeking a simple, low-maintenance option.
  • Eligibility: All employees; individuals set up their own Traditional or Roth IRA.
  • Contributions (2026): Employee: Up to $8,000 base (if under 50); plus $1,000 catch-up for age 50+ (total $9,000). No employer contributions required.
  • Pros: No annual IRS filing; easy payroll deductions. Withdrawals subject to 10% penalty before age 59½.
  • Cons: Lower limits; no loans or hardship withdrawals.
  • Tax Notes: Pre-tax for Traditional IRAs; Roth offers tax-free qualified distributions.

2. Simplified Employee Pension (SEP)

  • Best For: Tax-exempt entities with variable income, as contributions are flexible.
  • Eligibility: Employees aged 21+ with at least $750 compensation (2026 threshold) and service in 3 of the last 5 years.
  • Contributions (2026): Employer-only: Up to 25% of compensation or $72,000 max (whichever is less). No employee deferrals.
  • Pros: Easy setup; immediate 100% vesting; no annual testing.
  • Cons: Employer must contribute equally for all eligible employees; no loans.
  • Tax Notes: Contributions are tax-deductible for the employer.

3. SIMPLE IRA

  • Best For: Smaller tax-exempt employers (100 or fewer employees) not offering other plans.
  • Eligibility: Employees earning $5,000+ in any prior two years.
  • Contributions (2026): Employee: Up to $17,000; catch-up $4,000 for age 50+. Employer: Match up to 3% or 2% non-elective.
  • Pros: Low admin costs; immediate vesting for employee contributions.
  • Cons: 25% penalty on early withdrawals within first two years; no loans.
  • Tax Notes: Salary reductions reduce taxable income.

4. 401(k) Plan

  • Best For: Non-government tax-exempt entities (governments only if pre-1986 plans).
  • Eligibility: Must pass coverage tests; available to common-law employees.
  • Contributions (2026): Employee deferrals: $24,500; catch-up $8,000 (age 50+), or $11,250 for ages 60-63. Total (employer + employee): Up to $72,000 or 100% compensation.
  • Pros: High limits; Roth options; loans and hardship withdrawals allowed.
  • Cons: Annual nondiscrimination testing; Form 5500 filing required.
  • Tax Notes: Pre-tax or Roth deferrals; employer matches are deductible.

Nonprofits can offer 401(k)s alongside other plans, providing flexibility.

5. 403(b) Plan (Tax-Sheltered Annuity)

  • Best For: Public schools, 501(c)(3) organizations like hospitals and charities.
  • Eligibility: All employees for elective deferrals over $200; coverage tests for other contributions (exempt for governments).
  • Contributions (2026): Employee deferrals: $24,500; catch-up $8,000 (age 50+), plus special 15-year service catch-up up to $3,000. Total: Up to $72,000.
  • Pros: High limits; Roth options; loans permitted; simpler compliance for public entities.
  • Cons: Limited to annuities or mutual funds; potential Form 5500 if employer contributions.
  • Tax Notes: Ideal for tax-exempts; recent amendments required by December 31, 2026.

6. 457(b) Governmental Plan

  • Best For: State and local governments.
  • Eligibility: All employees and contractors; no coverage tests.
  • Contributions (2026): $24,500 deferrals; catch-up $8,000 (age 50+), or special up to $49,000 near retirement.
  • Pros: No early withdrawal penalty; Roth options; loans allowed.
  • Cons: No rollovers to non-457 plans without penalty.
  • Tax Notes: Post-tax contributions possible.

7. 457(b) Tax-Exempt Organization Plan

  • Best For: Non-church tax-exempts focusing on key employees.
  • Eligibility: Select management or highly compensated staff.
  • Contributions (2026): $24,500; special catch-up up to $49,000 (no age 50+ catch-up).
  • Pros: High deferrals; no coverage tests.
  • Cons: No rollovers; limited to top earners.
  • Tax Notes: Tax-deferred growth.

8. Defined Benefit Plan

  • Best For: Employers promising fixed benefits, like pensions.
  • Eligibility: Must pass coverage tests.
  • Contributions (2026): Actuarially determined; max annual benefit $290,000.
  • Pros: Guaranteed payouts; loans possible.
  • Cons: Complex admin; annual actuarial reviews.
  • Tax Notes: Employer-funded; deductible contributions.

Comparing Retirement Plans: Which One Fits Your Tax-Exempt Entity?

To choose the right plan, consider factors like organization size, budget, and employee needs. Publication 4484 includes a handy comparison chart:

Plan Type Sponsor Max Employee Deferral (2026) Employer Contribution Admin Complexity Loans Allowed?
Payroll Deduction IRA Any $8,000 None Low No
SEP Any None Up to $72,000 Low No
SIMPLE IRA Small (≤100 employees) $17,000 Required match Low No
401(k) Non-govt tax-exempt $24,500 Optional Medium Yes
403(b) Schools/501(c)(3) $24,500 Optional Medium Yes
457(b) Governmental Govts $24,500 Optional Low Yes
457(b) Tax-Exempt Non-church tax-exempt $24,500 Optional Low No
Defined Benefit Any N/A Required (actuarial) High Yes

IRA-based plans are simplest for startups, while 403(b) and 457(b) suit tax-exempt specifics. For hybrids, some nonprofits offer both 401(k) and 403(b) for broader options.

How to Establish and Maintain a Plan in 2026?

Follow these steps from IRS guidelines:

  1. Assess Needs: Evaluate employee demographics and budget.
  2. Select a Plan: Use the comparison above; consult a financial advisor.
  3. Set Up: No model forms for complex plans, but IRAs are straightforward.
  4. Comply: Use EPCRS for corrections (available for most plans). Note new safe harbor explanations for rollover notices.
  5. Update Annually: Adjust for limits like the $360,000 compensation cap.

For 403(b) plans, ensure amendments by year-end 2026.

Additional Resources for Tax-Exempt Retirement Planning

  • IRS Website: www.irs.gov/retirement for forms and updates.
  • Related Publications: 560 (Small Business Plans), 575 (Pension Income), 590-A/B (IRAs).
  • Contact: Tax-Exempt/Government Entities at 877-829-5500.
  • Tools: Employee Plans News for ongoing updates.

By leveraging IRS Publication 4484 and staying current with 2026 adjustments, tax-exempt government entities can build retirement programs that benefit everyone involved. Whether you’re a school administrator or nonprofit director, investing in employee futures strengthens your organization long-term. Consult a tax professional for personalized advice.