[Code of Federal Regulations]
[Title 26, Volume 15]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR31.3121(a)(5)-2T]

[Page 28-29]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 31_EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE--Table 
 
  Subpart B_Federal Insurance Contributions Act (Chapter 21, Internal 
                          Revenue Code of 1954)
 
Sec.  31.3121(a)(5)-2T  Payments under or to an annuity contract 

described in section 403(b) (temporary).

    (a) Salary reduction agreement defined. For purposes of section 
3121(a)(5)(D), the term salary reduction agreement

[[Page 29]]

means a plan or arrangement (whether evidenced by a written instrument 
or otherwise) whereby payment will be made by an employer, on behalf of 
an employee or his or her beneficiary, under or to an annuity contract 
described in section 403(b)--
    (1) If the employee elects to reduce his or her compensation 
pursuant to a cash or deferred election as defined at Sec.  1.401(k)-
1(a)(3) of this chapter;
    (2) If the employee elects to reduce his or her compensation 
pursuant to a one-time irrevocable election made at or before the time 
of initial eligibility to participate in such plan or arrangement (or 
pursuant to a similar arrangement involving a one-time irrevocable 
election); or
    (3) If the employee agrees as a condition of employment (whether 
such condition is set by statute, contract, or otherwise) to make a 
contribution that reduces his or her compensation.
    (b) Effective date. (1) This section is applicable November 16, 
2004.
    (2) The applicability of this section expires on or before November 
15, 2007.

[T.D. 9159, 69 FR 67055, Nov. 16, 2004]