All contributions to Icon accounts are made on a post-tax basis. However, Icon is a traditional IRA, a pre-tax account. The tax advantage is realized when the employee files their income tax return; the employee can indicate the amount contributed to their Icon account for the tax year, and generally, their gross income will be reduced by the amount contributed.
Payroll contributions and discretionary bonuses will not appear on the employee’s W2.
The employee’s contribution amount needs to be configured in your payroll system as a ‘generic’ or ‘other’ after-tax deduction.
If you have a discretionary bonus program, the post-tax bonus amount is what you need to facilitate into the employee’s Icon account as a one-time contribution.
In the above example, the employee’s total contribution amount will be displayed in the Icon platform (under Manage Contributions→ Contributions) and on their Icon account statement. Icon contributions will not be displayed on their W2.
If the employee makes a withdrawal from their Icon account during the tax year, they will receive a Form 1099 to include with their tax filing documents.
