Was terminated from the company 11/30/2017 but received severance package 1/8/2018. With that payment, I received 2018 W2, with box 13 checked, making me ineligible to deduct traditional IRA contribution. Company says their records show I have an active 401K (from prior years). IRS is not clear either on what is an "active participant".
The “Retirement plan” indicator in Box 13 shows whether an employee is an active participant in your company’s plan.
Active participant
Generally, an employee is an active participant if covered by a:
- defined contribution plan (for example, a 401(k) plan) for any tax year and is credited with any contributions or forfeitures, or
- defined benefit plan for any tax year that the employee is eligible to participate.
Don’t check the retirement plan box if your company only has non-qualified or 457(b) plans.
I was no longer an employee in 2018 - how can I be an active participant by virtue of prior years' balance in the 401K?
Thanks
