Is TIRA Qualified or Non-qualified?
Isn’t a T-IRA qualifed? Having sold annuities, I have always been told that IRA’s were qualified and checked the qualified box on the annuity application irrespecive of whether or not the funds may have originated in a 401K or other company sponsored plan or was an account opened by the individual outside of an employer plan. While at an Ed Slott workshop recently, Ed mentioned more than once that IRA’s were non-qualified which is substantiated on page 113 of one of the spiral bound books handed out in the workshop. I have asked several people including reps at insurance companies about this and they all thought ALL IRA’s were Qualified as well. Are IRA’s qualified or non-qualified and is there any distiction as to what type of funds the account may have started in when making the distiction while transferring the funds to a tax deferred annuity? If they are non-qualifed, do I need to go back and have the annuities that been issued recatagorized as non-qualifed?
Permalink Submitted by Alan Spross on Sat, 2008-10-18 02:02
The problem here is that “qualified” is used in several different contexts. An IRA is technically not a qualified plan, as Ed so indicated. However, for several different applications in the tax code, an IRA is treated as a qualified plan. This is likely to be the case with annuity issuers with respect to whether they issue a NQ annuity fully funded by after tax funds or an IRA funded by a rollover from a QRP or another IRA.
Al Fry works with annuities and may be able to refine the above.
Permalink Submitted by Al Fry on Sat, 2008-10-18 19:14
Alan is correct. A NQ Annuity is a non-IRA or non-Qualified Retirement Plan annuity. Annuity carriers typically use NQ for NQ annuities, and “Qualified” for IRA and QRP annuities.