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Taxmap/pubs/p571-002.htm#TXMP7552129e Who Can Participate in a 403(b) Plan?

403(b) Plan

Any eligible employee can participate in a 403(b) plan.

Taxmap/pubs/p571-002.htm#TXMP33b2ef0b Eligible employees.

The following employees are eligible to participate in a 403(b) plan.

• Employees of tax-exempt organizations established under section 501(c)(3) of the Internal Revenue Code. These organizations are usually referred to as section 501(c)(3) organizations or simply 501(c)(3) organizations.
• Employees of public school systems who are involved in the day-to-day operations of a school.
• Employees of cooperative hospital service organizations.
• Civilian faculty and staff of the Uniformed Services University of the Health Sciences (USUHS).
• Employees of public school systems organized by Indian tribal governments.
• Certain ministers (explained next).

Taxmap/pubs/p571-002.htm#TXMP7d2dd664 Ministers.

The following ministers are eligible employees for whom a 403(b) account can be established.

1. Ministers employed by section 501(c)(3) organizations.
2. Self-employed ministers. A self-employed minister is treated as employed by a tax-exempt organization that is a qualified employer.
3. Ministers (chaplains) who meet both of the following requirements.
   1. They are employed by organizations that are not section 501(c)(3) organizations.
   2. They function as ministers in their day-to-day professional responsibilities with their employers.

Throughout this publication, the term "chaplain" will be used to mean ministers described in the third category in the list above.

Taxmap/pubs/p571-002.htm#TXMP4a9ec0f7
Example.

A minister employed as a chaplain by a state-run prison and a chaplain in the United States Armed Forces are eligible employees because their employers are not section 501(c)(3) organizations and they are employed as ministers.

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