Question

Which of the following statements regarding a tax sheltered annuity (tsa) is incorrect? the income from the tsa is received income tax-free the amount contributed is deductible from taxable income the interest earnings are tax deferred a tax-sheltered annuity is available to employees of non-profit organizations?

Answer 1

The incorrect statement is : The income from the TSA is received income tax-free. Upon retirement, payments received by employees from the accumulated savings in tax-sheltered annuities are treated as ordinary income.