REMINDER: Changes to Tax Reporting for 403(b) Plan Distributions

Beginning with the 2017 tax year, the Tax Compliance Department of Northern Trust, our issuing bank, is no longer permitting a parsonage amount to be reported on Form 1099-R for gross distributions made during the year. Instead, “Taxable amount not determined” will be checked in Box 2b of your Form1099-R.

This change to Form 1099-R reporting has no adverse impact on you from a tax perspective.

You can still claim a parsonage exclusion on your tax return based on the lesser amount of:

  1. your declared parsonage amount with RPB,
  2. your actual allowable housing expenses, or
  3. the fair market rental value of a comparable furnished home in your neighborhood.

You and your tax accountant are responsible for the calculation and substantiation of the parsonage amount on your tax return.