The White House clarified Thursday that 401(k) plans won’t be targeted under President Donald Trump’s tax plan, after initial confusion over their fate.
Asked about the tax treatment of 401(k) accounts, White House press secretary Sean Spicer said he’d need to give reporters more information, saying he was unclear about how they would be dealt with under Trump’s plan.
Shortly after the briefing concluded, however, a White House official told MarketWatch that retirement saving is an exemption and not a deduction, and that Spicer was referring to deductions. Retirement saving, as well as homeownership and charitable-giving deductions, are protected, the White House official said.
That matches what Trump’s National Economic Council Director Gary Cohn said Wednesday.
Spicer was asked about 401(k) accounts in particular.
Also read: Americans may soon have to kiss these lucrative personal tax deductions goodbye.
One possible way 401(k) accounts would differ would be relative to Individual Retirement Accounts, where contributions are made by individuals after they receive income.
In 401(k) plans, individuals get to contribute income before it is taxed.