401k
Client flunked his ADT for 2008 deferrals.( I told him to get a safe harbor),The return of the deferrals occurs in 2009 All had to be returned. No employer contributions. For purposes of 2008 TIRA deductibility is he an active participant? ADI is 200m
Permalink Submitted by Martin Helmer on Fri, 2009-04-10 23:23
Looking at Notice 87-16, A-25, the person you asked about is an active participant for 2008. I’m assuming the plan year is the calendar year. The Notice uses an example of a person with excess deferrals instead of excess contributions. It then says when a person makes deferrals that are later returned, the person is still an active participant for the year of the deferral. I’m taking your reference to ADT to mean ADP, and ADI 200m to mean MAGI $200K.
Permalink Submitted by charles lore on Sat, 2009-04-11 01:59
Martin… Sorry for typos but this is very helpful. I was starting to think that since he will not have made a deductible 2008 contribution due to return of deferrals , he would be allowed a deductible TIRA contribution regardless of AGI but you have set me straight.
Chuck