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posted Jul 11, 2024 10:40:36 AM

Private Non-taxable Long Term Disability Insurance and ROTH IRA contribution income limits

Are payments from PLTD (Privately purchased Long Term Insurance) included in the Modified Adjusted Gross Income (MAGI)  used to determine the income limit for making IRA contributions?  For example, a couple has privately purchased  long term disability insurance with already taxed funds.  Any payments for a claim are therefore not taxable. The income limit is $240,000 for a married couple to make a ROTH IRA contribution.  That couple made $230,000 in the usual income and another $15,000 from PLTD.  Does the PLTD payment make that couple unable to contribute to their ROTH IRAs?

 

This question is similar to another one that I just posted, but I hope it is appropriate to post this one separately to avoid confusion between the issues.

 

Thank you in advance,

Greg

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1 Replies
Level 15
Jul 11, 2024 1:11:24 PM

The non taxable income is not included in the calculation of MAGI.