Q. To determine whether my client is eligible for a deductible IRA contribution, I explained that if he is covered under a retirement plan through his employer, he must qualify for the deductible IRA under the adjusted gross income (AGI) test. The employer offers a voluntary (elective deferrals only) 403(b) plan, but my client doesn’t participate in it. Is he considered to be “covered under a retirement plan”?
A. No. In a voluntary 403(b) plan, only employees who participate (or hold accounts) in the plan must qualify through AGI limits to have the deductible IRA. Simply being eligible to participate in a voluntary plan is not considered “covered under a retirement plan”!
Recent Comments
Does the roth requirement for catch-up contributions for people who earned $145,000 apply to 457...
Hi Ed,
I really liked this article and I think you make a lot of sense. And I had no...
I believe there's a misstatement in that last quote - it should refer to governmental and...
Working with several medical providers as clients, I note that the high-end earners tend to push...
Congratulations to NTSAA for landing a good one. Nathan's breadth of experience and...