Am I an Active Participant if I worked only one month?
Last Updated April 15, 2011
I worked for only one month last year and then retired. I made a contribution to my traditional IRA for last year. Am I eligible to treat it as a deductible IRA contribution ?
It depends.
If you are not an active participant, or married to an active participant, the contribution is fully deductible.
If you are an active participant, and/or married to an active participant, the deductibility of the contribution would be determined by your MAGI and tax filing status.
Despite the fact that you worked for only one month, you can still be considered an active participant if you received contributions and/or benefits under the plan. The determination of your ‘active participant ‘ status depends on the type of retirement plan, your eligibly for participating in the plan and/or if contributions are made to the plan.
See Active Participant for examples of when an individual is considered an active participant under a plan. See also, Active Participant Status–Can You Deduct Your IRA Contribution?