topic Definition of Covered by an Employer Retirement Plan in Retirement tax questions

Definition of Covered by an Employer Retirement Plan

watch131719 — Tue, 21 Oct 2025 23:44:52 GMT

I have read https://www.irs.gov/retirement-plans/are-you-covered-by-an-employers-retirement-plan multiple times. It is still not clear to me.

I left my previous employer last year, but I still have a balance in my previous employer 401k this year. This does not mean I am covered this year, right?

Re: Definition of Covered by an Employer Retirement Plan

rjs — Wed, 22 Oct 2025 00:43:06 GMT

That's right. Having a balance in a 401(k) plan from 2024 does not mean that you are covered in 2025, as long as no contributions were made to your previous plan in 2025, by either you or the employer.

Re: Definition of Covered by an Employer Retirement Plan

Opus 17 — Thu, 23 Oct 2025 16:41:24 GMT

In your other question you said you received a bonus that was paid in 2025, after you left the company. If there are 401k contributions on the bonus check, then you are a participant for all of 2025.