W-2: Box 12 code G amount & Retirement box (13) not checked. Am I covered by a retirement plan at work to calculate the deductibility of my Traditional IRA contributions?

[smilecat23]

My AGI is over the amount needed to claim a traditional IRA deduction on my return if I am considered covered by a retirement plan at work, but I can take the IRA deduction if I am not considered covered by a retirement plan at work.  I have a Box 12 amount on my W-2 (code G - 457(b) plan) and again the Retirement plan in box 13 is not checked.  So I am confused if I am considered covered by a retirement plan at work?  I would like to make a deductible IRA contribution if possible.

[dmertz · Accepted solution]

If your W-2 was prepared correctly, the lack of a mark in Box 13 Retirement plan suggests that the 457(b) plan is not a calendar-year plan but instead operates on a fiscal year and that you did not make any 457(b) elective deferrals in the plan's fiscal year that ended in 2017, but instead made elective deferrals later in 2017.  However, if you made elective deferrals throughout 2017, the lack of the mark in Box 13 Retirement plan means that your W-2 is incorrect.

Because Box 13 Retirement plan is not marked, TurboTax will rely on your own indication of whether or not you were covered by a retirement plan at work for 2017.  In the traditional IRA contribution section TurboTax will ask you if you were covered by a retirement plan at work.  You should answer No if you did not make elective deferrals in the 457(b) plan tax year that ended with or within 2017, otherwise answer Yes.  If you answer Yes, TurboTax will determine the deductibility of your traditional IRA contribution based on your modified AGI for the purpose.

[Romeo Tango Foxtrot Mike]

For others who may come looking for an answer to a question about 457(b) plans and Box 13, according to the IRS in "Common Errors on Form W-2 Codes for Retirement Plans" at <https://www.irs.gov/retirement-plans/common-errors-on-form-w2-codes-for-retirement-plans>, "Don't check the retirement plan box if your company only has non-qualified or 457(b) plans."