is a regular employer pension a "qualified retirement plan accroding to IRS?

[Xian2]

I am in TT and its asking if I have a qualified retirement plan - ie to check if I am eligible to take a Trad IRA deduction........

I have 401ks, but did not make any contributions last year, since I retired in 2019

I also collect an "old style" regular pension  ie monthly payments until my death...   is this kind of plan also a qualified retirement plan?

[SundayInSalem]

A 401(k) and a traditional defined benefit pension are both qualified retirement plans.

According to a non-technical explanation by Bankrate: "A qualified retirement plan is a retirement plan recognized by the IRS where investment income accumulates tax-deferred. Common examples include individual retirement accounts (IRAs), pension plans and Keogh plans. Most retirement plans offered through your job are qualified plans."

What is a qualified retirement plan

[DawnC]

Covered by a retirement plan means you are eligible to make contributions at work.   If you are retired and not working, the answer would be NO.  To contribute to an IRA, you (or your spouse) must have earned income.    If you are not covered by a retirement plan at work (because you didn't work in 2020), is there earned income on your return?   If not, you can't make IRA contributions anyway.  

[Xian2]

good point, and yes I actually received a bonus payment for 2019 in 2020 and got a W2 for it....

but I wonder if just collecting a company pension already limits then y ability to get a a tax deduction for any IRA contribution as per my original question

[SundayInSalem]

You can make an IRA contribution if you received a W-2. Income reported on a W-2 is qualifying compensation for an IRA contribution. The IRS defines compensation as generally "what you earn from working," including "Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation. The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W-2, Wage and Tax Statement, provided that amount is reduced by any amount properly shown in box 11."

Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs)

[Xian2]

thanks to both of you for replying - but the real question remains... so here the key points..

- I have a W2from previous employer for a delayed bonus payment

- so I can contribute to a Trad IRA

- when I plug in into TT - the deduction is changing depending how I answer the question about having a "qualified retirement plan"

- I was retired last year and did not work

- I have an existing 401k - but no contributions were made as I was retried

- I am collecting a company pension from previous employer

the question is if having a 401k or company pension then means I Have a "qualified retirement plan"

if yes then TT tax savings of making an IRA contribution seems very little versus if NO then it looks as the whole contribution reduces my taxable

so please let me know if my 401k/pension are qualified

and also would like to know why in one case the IRA contribution does not reduces taxes as much as in other case....

thanks

[Irene2805]

No -- You are not considered covered by a retirement plan. 

According to IRS Pub. 590-A - Contributions to Individual Retirement Arrangements (IRAs) [p. 12]:  "If you receive retirement benefits from a previous employer's plan, you aren’t covered by that plan."

[Irene2805]

No -- You are not considered covered by a retirement plan. 

According to IRS Pub. 590-A - Contributions to Individual Retirement Arrangements (IRAs) [p. 12]:  "If you receive retirement benefits from a previous employer's plan, you aren’t covered by that plan."