Economic Recovery Tax Act of 1981 (ERTA)

Definition

ERTA changed the laws to allow participants covered by employer-sponsored plans to make participant contributions to IRAs. Prior to ERTA, only individuals not covered by an employer sponsored plan could make regular contributions to IRAs.

Referring Cite

IRC §

Additional Helpful Information

• ERTA increased contribution limits to SEP IRAs to $15,000 per year. This has since been increased by other tax laws
• ERTA made investment in collectives a prohibited transaction.

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