I terminated employment with a company on 12-31-17. I received a 2018 W-2 for a stub payroll earned the last week of 2017 but paid in January 2018 (inclusive of a 401k contribution). In fact, I did not participate in an employer retirement plan in 2018 as I was no longer an employee. I believe that as as a result of the retirement plan box being checked in the W-2, Turbo Tax is not allowing me to make a tax-exempt contribution to my IRA for 2018. Is there any work around? My ex-employer says that they can't uncheck the box because of the single 401k contribution in January 2018, which they deducted from taxable wages in the stub payroll--despite acknowledging that I was not a retirement plan participant in 2018. Help!
You are considered covered by a retirement plan all year if only covered for one day. You can always contribute to a Traditional IRA if you have earned income even though your deduction could be limited because of the employer's plan.
Please see this IRS link for IRA deduction limits when covered by a retirement plan at work, to determine if your contribution is limited. https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits