Deductible IRA rule
A client of mine was covered by a qualified plan for part of 2007. Since they were not covered for the entire year, are they allowed to make a deductible IRA contribution?
A client of mine was covered by a qualified plan for part of 2007. Since they were not covered for the entire year, are they allowed to make a deductible IRA contribution?
Permalink Submitted by Denise Appleby on Wed, 2008-04-09 20:03
It depends.
First, it depends on what you mean by ‘covered’ . See http://www.retirementdictionary.com/active-participant.htm specifically the chart labeled “Type of Plan- Determination of Active Participant Status”
Second, the length of coverage does not matter. A few weeks of coverage is the same as being covered for the entire year.