IRA Income limit vs. 401k participation

Submitted by Undocumented Newcomer on Thu, 2020-12-17 19:57

If a person is eligible to participate in a 401k but chooses not to, is (s)he governed by maximum income limits for deductible TIRA contributions?

Thanks,
Michael



Submitted by Alan - IRA critic on Thu, 2020-12-17 20:01

Usually not. However, if the plan makes contributions for the prior year (eg a profit sharing contribution) to a  401k account for the benefit of the person, the employer will check the retirement plan box on the W-2. If that box is checked, the MAGI limits are triggered for IRA deduction purposes.

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