Employer offers retirement plan but employee does not participate. Block 13 of W-2 form indicates "retirement plan". The employee is being denied the deduction for IRA since combined income with spouse is over $119,000 and the employer offers a retirement plan. Anyway around this?
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It appears as though the employer may have made a mistake on the W2, you should seek a correction so that your IRA contributions can be deducted and so that the IRS has the correct information. Review the information below before contacting the employer.
Form W-2, Box 13
The “Retirement plan” indicator in Box 13 shows whether an employee is an "active participant" in your company’s plan. If this box is checked, it lets the recipient know that depending on their filing status and modified adjusted gross income, they may not be entitled to a full deduction for their traditional IRA contributions. You should check the retirement plan box if an employee was an “active participant” for any part of the year in:
a qualified pension, profit-sharing, or stock-bonus plan under Internal Revenue Code Section 401(a) (including a 401(k) plan).
an annuity plan under IRC Section 403(a).
an annuity contract or custodial account under IRC Section 403(b).
a simplified employee pension (SEP) under IRC Section 408(k).
a SIMPLE retirement account under IRC Section 408(p).
a trust described in IRC Section 501(c)(18).
a plan for federal, state, or local government employees or by an agency or instrumentality thereof (other than a 457(b) plan).
Active participant
Generally, an employee is an active participant if covered by a:
It appears as though the employer may have made a mistake on the W2, you should seek a correction so that your IRA contributions can be deducted and so that the IRS has the correct information. Review the information below before contacting the employer.
Form W-2, Box 13
The “Retirement plan” indicator in Box 13 shows whether an employee is an "active participant" in your company’s plan. If this box is checked, it lets the recipient know that depending on their filing status and modified adjusted gross income, they may not be entitled to a full deduction for their traditional IRA contributions. You should check the retirement plan box if an employee was an “active participant” for any part of the year in:
a qualified pension, profit-sharing, or stock-bonus plan under Internal Revenue Code Section 401(a) (including a 401(k) plan).
an annuity plan under IRC Section 403(a).
an annuity contract or custodial account under IRC Section 403(b).
a simplified employee pension (SEP) under IRC Section 408(k).
a SIMPLE retirement account under IRC Section 408(p).
a trust described in IRC Section 501(c)(18).
a plan for federal, state, or local government employees or by an agency or instrumentality thereof (other than a 457(b) plan).
Active participant
Generally, an employee is an active participant if covered by a:
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