B describes a qualified plan. Qualified plans are employer sponsored retirement plans that have special tax treatment under section 401(a) of the tax code.

Training Mode

Unit 1 Unit 2 Unit 3 Unit 4

Which of the following BEST describes a qualified plan?

An employer sponsored plan where contributions are made by the employer when an employee qualifies with a certain amount of tenure.

An employer sponsored plan that where income tax is not paid on the employer contributed amounts until money is withdrawn.

An individual retirement plan where tax is paid up front and money can be withdrawn tax free during retirement.

An individual retirement plan where tax deductible contributions are made and taxes are paid when money is withdrawn.