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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75335  
Subject: Re: 401(K) participation year - how is this defi Date: 12/18/1998 8:44 AM
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Greetings, Paul, and welcome. You asked:

<<I will soon be changing jobs, from one where I have a 401(K) to one where I will need to open an IRA (I'll also be rolling over the 401(K), probably into a separate Rollover IRA, though).

Although my last working day will be in 1998, I probably won't receive the paycheck until 1999, and I'm sure my 401(K) deduction will be included. Does this mean I participated in the plan in 1999 (when the check arrived) or 1998 (when the salary was earned)?

I tend to think (and hope) it's the latter, because the former (plus the AGI limitations when participating in a company retirement plan) would exclude and 1999 IRA contributions.>>


The money was earned in and contributed for 1998. Your Form W-2 for the year should reflect that fact. Therefore, you will not have participated in a qualified retirement plan based on that job on any day in 1999 nor will any compensation from that job be included in your income for 1999. Your HR department should verify that is correct.

Regards….Pixy

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