Employer Plans - FICA

Question 1

Which of the following contribution types are subject to FICA?

A. Defined Benefit Plan (Qualified) - Employer Contribution

B. Defined Contribution Plan (Qualified) - Employee Deferral

C. Defined Contribution Plan (Qualified) - Employer Contribution/match)

Answer 1

Only B (employee deferral).

Employer contributions/matches are never subject to FICA

Question 2

Which of the following distribution types are subject to FICA?

A. Qualified Defined Contribution or Defined Benefit Plans

B. Traditional IRAs

C. Non-Qualified Deferred Comp plans

Answer 2

Only C

Question 3

Why aren’t employer contributions to qualified retirement plans not subject to FICA?

Answer 3

FICA is by statute only levied on “wages.” This is why employee deferrals are subject to FICA, but employer contributions are not.