Traditional IRA Deductibility (“active participant”

Submitted by ShipsnGiggles on Tue, 2013-04-09 17:04

I am receiving conflicting information on the following

Is an employee that is eligible to participate but elects not to defer compensation into a SIMPLE IRA considered an “active participant” for the purposes of T-IRA deductibility?

same question as above except 401(k)plan?

Thank you!



Submitted by Alan - IRA critic on Tue, 2013-04-09 17:50

401(k), 403(b), Salary deferral SEP, SIMPLE IRA

The individual is an active participant if the individual elects to defer compensation (make salary deferral contributions) to the to a plan. If the individual is eligible to make salary deferral contributions, but declines to make such salary deferral contributions for a year, and no other contributions or forfeitures are allocated to such individual’s account for the plan year ending with or within the individual’s taxable year, the individual is not an active participant for that year.

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