Company Sponsored 401K and Loss of Emplpyment

[TammieHangauer]

Hello,

I was participating in a company sponsored 401K but lost my job in March so only contributed a small amount.  Can I add funds to an individual IRA to reduce taxable income?

[MinhT1]

You are considered as covered by a retirement plan by work, even if you only worked there part of the year. Your 2020 form W-2 should have a check mark in box 13 - Retirement plan.

As a covered individual, your eligibility to contribute to a Traditional IRA depends on your filing status and your Modified Adjusted Gross Income (MAGI).

You can check your eligibility by reading this IRS document. 

[dmertz]

Because you were an active participant in a workplace retirement plan in 2020, whether or not you are eligible to deduct a traditional IRA contribution depends on your filing status and modified AGI for the purpose of an IRA deduction:

https://www.irs.gov/retirement-plans/plan-participant-employee/2020-ira-contribution-and-deduction-l...