Belgarath Posted March 9, 2015 Posted March 9, 2015 Employer has a SIMPLE-IRA, but inadvertently excludes an employee for all of 2014. This will be corrected in 2015 via a make-up contribution. Is employee an "active participant" in a plan for 2014 for determining deductibility of any IRA contribution? Unless I'm off base, under 1.219-2, it is the later of the date the contribution is made or allocated. So since made - or will be made in 2015, then not an active participant for 2014. Any other thoughts?
Flyboyjohn Posted March 10, 2015 Posted March 10, 2015 Did the employer check the "Active Participant" box on the employee's 2014 W-2? Not that it's right but that's how the IRS computer will test for IRS deductibility
Belgarath Posted March 10, 2015 Author Posted March 10, 2015 Yes - that's what actually brought up the question.
mbozek Posted March 12, 2015 Posted March 12, 2015 Is been a while but I thought the rule for active participation in a DC plan was whether a contribution was made to employee's account in the tax year not whether he was eligible to participate under the plan. Why not just change the w-2 for 2014? mjb
Belgarath Posted March 12, 2015 Author Posted March 12, 2015 Yup, we are all in agreement. Thanks for the responses.
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