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What are Deemed IRAs under Employer Plans?

April 26, 2017deemed employer IRAs plans

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What are Deemed IRAs under Employer Plans?

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Under the EGTRRA, effective for plan years beginning after 2002, if an eligible retirement plan (such as a 401(k) plan or 403(b) plan) allows employees to make voluntary contributions to a separate account that is established within the plan and meets the requirements of either a traditional IRA or Roth IRA, then the account will be deemed a traditional IRA OR ROTH IRA. The contributions would be governed by the tax law rules for the type of IRA chosen.