Is Deferred Comp income eligible for RothIRA? offset by any NQP income…
A few years back from a previous employer, I started receiving a “Deferred Compensation payout” and a “Long Term Incentive Plan” payout (assuming NQP) over a multiyear year period. In 2019 at then current employer, I was able to fully fund my 401K before being laid off in the 4th quarter and had never needed to use this income for funding a: 401K; IRA.
I don’t yet have my 2020 W-2 yet, but modeling off my 2019 W-2; Box 1 = $6,230; Box 11 {Nonqualified_Plans} = $1,812; Box 14 {NY_Wages} = $6,230
For 2020, i have no earned income from a job, but am I eligible to put Box 1 less Box 11 (~= $4,418) into a 2020 RothIRA?
Thanks in advance!
Jim
Permalink Submitted by Alan - IRA critic on Sat, 2020-12-05 17:32
Yes, as long as your MAGI is not too high for a Roth contribution, you can use the Box 1 less Box 11 figure as earned income for IRA contribution purposes. Of course, you may not know what that number is until you get the 2020 W-2 in January.
Permalink Submitted by James Schneider on Sun, 2020-12-06 21:13
Alan,Thank you so much for your knowlegeable clarification! My accountant last visit was not very clear on my options with this type income. Then again my income used to be high and this is my first year with very little income. (except these deferred type of payouts)Regards, Jim