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February 19, 2009




Amounts added to a retirement account, usually as a result of the participant deferring receipt of compensation in order to have the amount added to the account, or the employer adding the amount to the account on the employee’s behalf.

Forms of contributions include:

  • Contributions to IRAs, where individuals add amounts to IRAs based on their taxable (and eligible) compensation. For traditional IRAs, contributions can be deductible, if the individual is eligible to claim the deduction. Roth IRA contributions are not deductible
  • Amounts used to fund HSAs and ESA
  • Amounts added to qualified plans, 403(b) arrangements and other employer sponsored plans. These take the form of employer contributions, which can be a discretionary contribution, or a required contribution; and employee contributions which are salary deferral (or salary reduction) contributions.
  • Rollover contributions, which are amounts distributed and recontributed to an eligible retirement account .

Contributions must be within statutory limits. For instance, see The IRS Announces Plan Limits for 2008

Referring Cite

IRS Publication 590, IRS Publication 560, IRC 401(a), the IRA , HSA, ESA Agreement or Plan Document

Additional Helpful Information

  • Rollover contributions must be made within any specified time limitations. For instance, indirect rollovers must usually be completed within 60-days
  • Contributions to IRAs must be made in cash. This includes contributions to SEP IRAs and SIMPLE IRAs. Exceptions to rollover contributions, where the individual rollovers the same property that was distributed

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IRA Rules