### Question
How does the law define applicable employment retention plan?


### Answer
Under *26 U.S.C. § 457*, **applicable employment retention plan** is defined as:

> an employment retention plan maintained by—


(i) a local educational agency (as defined in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801),[1](#457_1_target) or


(ii) an education association which principally represents employees of 1 or more agencies described in clause (i) and which is described in section 501(c)(5) or (6) and exempt from taxation under section 501(a)

#### Citation:
  - *26 U.S.C. § 457*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter E-Accounting Periods and Methods of Accounting > PART II-METHODS OF ACCOUNTING > Subpart B-Taxable Year for Which Items of Gross Income Included**

