For 2002, self-employed ministers and church employees who participate in 403(b) plans generally follow the same rules as other 403(b) plan participants.

This means that if you are a self-employed minister or a church employee, your MAC for 2002 is the lesser of your:

• Limit on annual additions, or
• Limit on elective deferrals.

The rules for figuring your limit on annual additions for 2002 are explained below under Limit on annual additions. To figure your limit on elective deferrals for 2002, follow the rules explained earlier in this chapter under Limit on Elective Deferrals.

Limit on annual additions. If you are a self-employed minister or a church employee, your limit on annual additions for 2002 generally is the lesser of:

• $40,000, or
• 100% of your includible compensation for your most recent year of service.

When figuring your includible compensation for your most recent year of service, do not include employer contributions to your 403(b) account, even if you are a foreign missionary.

As this publication was being prepared for print, Congress was considering legislation that would allow foreign missionaries to include these contributions as includible compensation. For more information see, your plan administrator.

Increased limit. You can also elect an increased amount for the limit on annual additions. Under this election, you can increase your limit on annual additions to $10,000 a year. Total contributions over your lifetime under this election cannot be more than $40,000.

Years of service. For years beginning after 2001, you will figure your years of service separately for each employer.

As this publication was being prepared for print, Congress was considering legislation that would allow church employees to treat all years of service with related church organizations as years of service with one employer. For more information, see your plan administrator.

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