Tax Facts

4096 / When may an employer deduct contributions to a welfare benefit fund?

Contributions paid or accrued by an employer to a welfare benefit fund generally will be deductible when paid to the fund, if they are otherwise deductible, subject to the limit discussed in Q 4097.1 If contributions paid by an employer during a taxable year exceed the deduction limit, the excess is treated as paid to the fund in the next taxable year.2

1.   IRC § 419(a).

2.   IRC § 419(d).

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