The Contribution Rules for Payroll Deduction IRAs

Q. What are the contribution rules for payroll deduction IRAs?

A. The contribution rules for payroll deduction IRAs are as follows:

• Employees fund their own payroll deduction IRAs through payroll withholding.
• Contributions to each employee’s account is limited to the IRA contribution limit—for 2022, that’s $6,000 (plus $1,000 if age 50+).
• Payroll deduction IRA contributions are sent to each financial institution; employers have no further responsibility for the amounts contributed.