A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. Some of the key features of 401k plans are:

• Elective salary deferrals are excluded from the employee’s taxable income (except for designated Roth deferrals).

• Employers can contribute to employees’ accounts.

• Distributions—including earnings—are includible in taxable income at retirement (except for qualified distributions of designated Roth accounts).

In Kansas, as in all states, 401(k) plans are governed by federal law, specifically the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code. Employees in Kansas can elect to defer a portion of their salary into their 401(k) accounts, which reduces their taxable income for the year of the deferral, except in the case of Roth 401(k) contributions, which are made with after-tax dollars. Employers have the option to make contributions to their employees' 401(k) accounts, which can be in the form of a match or other contribution. Upon retirement or when taking distributions, the money withdrawn from a traditional 401(k) account, including any earnings, is subject to income tax. However, qualified distributions from a Roth 401(k) are generally tax-free, provided certain conditions are met. It's important to note that while the state of Kansas may have its own tax rules, the fundamental principles of 401(k) plans are consistent across the United States due to their federal regulation.