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ITExec
Level 2

Traditional IRA Contribution

TurboTax is asking if I was covered by an employer retirement plan in 2020 to determine if I can contribute to a Traditional IRA to reduce my taxes.   My wife is not employed in 2020.  However, I lost my job April 2020.  I was previously covered under an employer 401K until I was released.  Can my wife and I both still contribute to a traditional IRA for 2020 tax year since I was no longer covered under employer retirement plan after April?

1 Best answer

Accepted Solutions
ColeenD3
Expert Alumni

Traditional IRA Contribution

Unfortunately, no. If you are covered for even one day, you are considered to be covered for that year.

 

You can contribute to a traditional or Roth IRA even if you participate in another retirement plan through your employer or business. However, you may not be able to deduct all of your traditional IRA contributions if you or your spouse participates in another retirement plan at work. Roth IRA contributions might be limited if your income exceeds a certain level.

 

Covered by employer plan

 

 

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2 Replies
ColeenD3
Expert Alumni

Traditional IRA Contribution

Unfortunately, no. If you are covered for even one day, you are considered to be covered for that year.

 

You can contribute to a traditional or Roth IRA even if you participate in another retirement plan through your employer or business. However, you may not be able to deduct all of your traditional IRA contributions if you or your spouse participates in another retirement plan at work. Roth IRA contributions might be limited if your income exceeds a certain level.

 

Covered by employer plan

 

 

ITExec
Level 2

Traditional IRA Contribution

Thanks for the information.  I thought that might be the case.

 

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