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Does covered by retirement mean for whole year or as of 12/31?

Changed jobs, for half the year was covered by retirement plan, but as of 12/31 (2nd job) not covered.  So can I make a 100% deductible traditional IRA regardless of income? Can I make a Roth IRA .  Income over limit for traditional but if not covered by retirement plan (as of 12/31/16) do you ignore income level?

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AnnetteB
Intuit Alumni

Does covered by retirement mean for whole year or as of 12/31?

“Covered by a retirement plan at work” applies for the whole year if it applies for any part of the year.  Not being covered as of the last day of the year does not allow you to ignore the limitations for contributing to IRAs based on being covered by a retirement plan. 

Since you were covered by a retirement plan for part of the year, you will have to consider the contribution limits based on income for covered individuals with regard to either a Traditional or Roth IRA contribution for 2016. 

Here is a link to more information about the definition of “covered by a retirement plan at work”:  https://www.irs.gov/retirement-plans/are-you-covered-by-an-employers-retirement-plan


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1 Reply
AnnetteB
Intuit Alumni

Does covered by retirement mean for whole year or as of 12/31?

“Covered by a retirement plan at work” applies for the whole year if it applies for any part of the year.  Not being covered as of the last day of the year does not allow you to ignore the limitations for contributing to IRAs based on being covered by a retirement plan. 

Since you were covered by a retirement plan for part of the year, you will have to consider the contribution limits based on income for covered individuals with regard to either a Traditional or Roth IRA contribution for 2016. 

Here is a link to more information about the definition of “covered by a retirement plan at work”:  https://www.irs.gov/retirement-plans/are-you-covered-by-an-employers-retirement-plan


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