Are employer 401(k) contributions ever taxed as income when they go in?
Traditional employer match and profit-sharing contributions are not taxed when deposited; they grow tax-deferred and are taxed as ordinary income when you withdraw them in retirement. They do not count as taxable wages on your W-2 in the year contributed.
SECURE 2.0 now lets plans offer a Roth employer match, which is different: if you elect a Roth match, that amount is included in your taxable income for the year it is contributed, but then grows tax-free. Also note that employer contributions are never subject to Social Security or Medicare (FICA) tax, unlike your own Roth deferrals, which are made from already-FICA-taxed pay. Check whether your plan offers the Roth match option and whether it fits your tax situation.
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