Question

Choose the incorrect statement regarding qualified plans?

A. Qualified plans have a special tax advantages under ERISA.
B. Rollovers are subject to tax unless reinvested within 30 days.
C. Trustee to trustee rollovers are permitted without actual distribution of funds.
D. TSA (403b) plans are salary reduction plans with contributions in before-tax dollars.

Answer 1

The incorrect statement regarding qualified plans is that rollovers are subject to tax unless reinvested within 30 days.

Step-by-step explanation:

The incorrect statement regarding qualified plans is B. Rollovers are subject to tax unless reinvested within 30 days.

Qualified plans have special tax advantages under ERISA, so statement A is correct. Statement C is also correct; trustee to trustee rollovers are permitted without actual distribution of funds. Statement D is correct as well; TSA (403b) plans are salary reduction plans with contributions in before-tax dollars.

Therefore, the incorrect statement is B. Rollovers are not subject to tax unless reinvested within 30 days.