Where do I enter in Turbotax that I am not covered by employer sponsored retirement plan in TurboTax

[ErnieS0]

If you have a W-2 you may still be considered covered by a retirement plan if you have a W-2 and the retirement plan box is checked.

The Form W-2 you receive from your employer has a box used to indicate whether you were covered for the year. The “Retirement plan” box should be checked if you were covered.

Are You Covered by an Employer Plan?

If the retirement plan box is not checked on your W-2, see whether the retirement plan box is checked on the IRA Contribution Worksheet.

1. Tap Forms in the top right on TurboTax CD/Download
2. In the left column (Forms in My Return) find IRA Contrib Wks
3. Uncheck Box 10
4. Tap Step-by-Step in the top right to get back to the interview mode

[RetinSix]

Hi, line 10 does have it checked, i.e. Turbotax is configured to reflect I am covered by a retirement plan at work. I can't uncheck  box 10 for me.  It is blank for my wife. When I click it, a blue X pops in and I am able to remove it. It looks like the black X is hardcoded for me. Maybe there is another place?

[RetinSix]

I see how I can get the line 10 "X" removed from the IRA Contrib Wks. I retired at the end of 2020. In 2021, I received a W-2 that had no checks  in box 13 but my former employer had a dollar amount  for Code D in box 12.   if I remove that dollar amount, Turbotax then removes the line 10 "X".  Turbotax must equate "covered by employer retirement plan" if a dollar amount is entered in W-2 Box 12  Code D.  Now, how I guess the challenge is to find out if that is correct?

[AnnetteB6]

Code D in box 12 of your W-2 does indicate a contribution to a 401k plan.  Because it is indicating that a contribution was made to your 401k, you are considered to be 'covered by a retirement plan' and therefore your IRA contribution may be limited.

For your reference, here is the IRS definition:

Are You Covered by an Employer's Retirement Plan?

@RetinSix

[RetinSix]

I see in the IRS webpage that if I am not sure if I am covered by a retirement plan, my former employer will tell me if I am. I have reached out to them and asked them to tell me. My W-2 from them had no X's in Box 13 so it should be clear, right?

[Pete7566]

Thanks to you and others for valued insights.   I do not have a D code on my W-2 and I do not participate in any retirement plan at the present time.  

[RetinSix]

Okay, I found out how to get Turbotax to ask me again if I am covered by a retirement plan at work. 

1) I remove the 2021 IRA contributions that I had entered for my wife and I

2) I go to "Other Tax Situations", "Retirement Savings" and click on IRA calculator tool. 

Since I am starting with no IRA contributions, the program asks me to contribute! And if I am covered by a retirement plan at work! Success!

As I mentioned in another post, I have defaulted to the IRS recommendation to ask my former employer if I was covered by a retirement plan at work. Once I hear from them, I will finalize my return aligning with what they tell me.

[Jeff1]

I was covered by an employer retirement plan for four months of the year but was unemployed for the rest of the year.  I am trying to make a deductible contribution to my traditional IRA but TurboTax says I can't because I am covered by and employer retirement plan (which I was not for most of the year).  How do I change this?

[DanaB27]

Please be aware, if you were covered by a retirement plan for one day during 2021 then you are deemed to have been covered for the whole year and the IRA deduction limits apply.

@Jeff1

[avsteele]

I'm getting a notice that I cannot deduct my IRA contribution because of an income limit.  This should not apply as neither I nor my spouse are covered at work.

My W-2 does NOT have box 13 checked, nor any field in box 12 filled (neither the actual W-2 nor the one in TT generated).

I never got any prompt specifically asking me if I or my spouse was covered and I cannot find where to assert that I am not.

However I note that my spouse does receive 1099-R income from military retirement (non-qualified plan).  Is this the problem?

Thanks much @DanaB27 

[DanaB27]

No, the military retirement on Form 1099-R should not be an issue. 

To recap, you verified that your W-2 entry doesn't accidentally have box 13 checked, but are getting the message you cannot deduct your traditional IRA contribution because of your income and a retirement plan at work.

The retirement plan coverage question should come up during the IRA contribution interview if none of the W-2s have box 13 checked:

1. Click on "Search" on the top right and type “IRA contributions” 
2. Click on “Jump to IRA contributions"
3. Select “traditional IRA”
4. Continue until you get the "Retirement Plan Coverage" screen and select "no"

[avsteele]

@DanaB27Thanks for your reply.  It never asks me that question. The order I see after selecting

Myself /'Traditional IRA:' checkboxes

->

"Is This a Repayment of a Retirement Distribution?"

->

"Tell Us How Much You Contributed"

->

"Did You Change Your Mind?" (i.e. reclassify)

->

"Any Excess IRA Contributions Before 2021?"

->

"Any Nondeductible Contributions to Adam's IRA?"

Then it goes to "Income Too High To Deduct an IRA Contribution"

[DanaB27]

It seems that TurboTax has somewhere information saved that you are covered by a retirement plan since the question isn't coming up. Usually, this information is when the box 13 on the W-2 gets accidentally checked during entry/import. 

Please try this to delete the IRA contribution worksheet and then reenter the contribution to see if the question will pop up:

1. In the left menu, select "Tax Tools" and then "Tools".
2. In the pop-up window Tool Center, select "Delete a form".
3. Select "Delete" next to the "IRA Contributions Worksheet" in the list and follow the instructions.

If this doesn't help it would be helpful to have a TurboTax ".tax2021" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Online: 

1. From the left menu select Tax Tools. 
2. Then select Tools below Tax Tools. 
3. A window will pop up which says Tools Center.  
4. On this screen, select Share my file with Agent. 
5. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
6. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

@avsteele

[avsteele]

Thank you @DanaB27, but deleting and re-entering the IRA form did not change the result.

I created the file per your instructions:

A protected copy of your return has been sent.

Your token number is: 984126

Please keep this number for your reference.

[DanaB27]

Thank you. I review your return and you have a contribution to SEP plan entered (see Koegh, SEP, and SIMPLE Contribution Worksheet line 4) therefore you are considered to be covered and the question won't come up.

According to the IRS:

"You’re covered by an employer retirement plan for a tax year if your employer (or your spouse’s employer) has a:

• Defined contribution plan (profit-sharing, 401(k), stock bonus and money purchase pension plan) and any contributions or forfeitures were allocated to your account for the plan year ending with or within the tax year;
   
• IRA-based plan (SEP, SARSEP or SIMPLE IRA plan) and you had an amount contributed to your IRA for the plan year that ends with or within the tax year; or
   
• Defined benefit plan (pension plan that pays a retirement benefit spelled out in the plan) and you are eligible to participate for the plan year ending with or within the tax year."

@avsteele