Looking to confirm IRA deductibility rules in this scenario:

• A 401(k) plan exists, but due to “testing” (my guess is ADP/top-heavy test), a highly compensated/key employee isn’t allowed to contribute this year.

• I believe the employee is still technically eligible under the plan.

• Income is above the range for IRA deductibility if “covered” by a workplace plan.

Questions:

1. Is the employee still considered “covered” even if they’re excluded from contributing this year?

2. If yes, does that trigger IRA deduction phaseouts based on income?

Thanks for any insights!