New Tax Implications for Leave Payouts at Retirement
Below is some information from Tom Quirk on changes coming in 2026 regarding leave payouts and tax deferrals.
If you make over $145,000 in 2025 and receive your leave payout in 2026, you cannot defer the taxes by putting the money in a tax deferred account (457b). You can only put it in a Roth account and pay the taxes up front.
The link below is to an article on this issue from Mission Square, a firm that handles many 457(b) plans for municipal employees.
Tom Quirk will be having a presentation on this and other retirement issues at the Lodge on May 8, 2025 at 4pm. A spot can be reserved by contacting Tracy McCartin at TracyMcCartin@retirementandinvestment.com