The deadline for a contribution to a Roth IRA under the Worker, Retiree, and Employer Recovery Act of 2008 is June 22, 2009. If you're a procrastinator and were meaning to get around to it, you might want to start getting around to it now. Less than 2 weeks to go.....
June 22 deadline for Roth IRA contribution
- Thread starter ualdriver
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Me too!
Do you work for a major airline that distributed bond and/or stock money to you that was given to you due to their bankruptcy? Did you receive Form 8935? Answer that and we'll go from there.
xkuzme1
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No. None of the above.
Then opening a Roth under this Act doesn't apply to you. However, if you want to open a Roth and make an annual contribution, you can contribute $5000 or $6000 (50 or order) whenever you want, for each you and your spouse, assuming you have earned enough income.
RedRum
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I never received Form 8935. Therefore I thought maybe I had misplaced it or maybe it never came in the mail.
I called and asked the company why I didn't receive IRS Form 8935. Apparently, for us NWA (DAL-N) pilots. If you were not a participant in the DB program, you were not eligible for the Roth IRA contribution. I will withhold comment as far as participating in the DB ad I was for over a year, but now I receive none of that. But, for those of you who are frantically looking for their form 8935 and/or never received one, this may be the reason why you did not receive one.
My question is what about the Delta pilots who were hired from the time frame 12/99 through 06/01. Did any of you guys receive form 8935? I guess it is a matter of whether or not you will be receiving any disbursements from the terminated pension.
By DB program, I assume you mean defined benefit program? I don't think there is anything in the Act that states that you must be a member of a DB program in order to contribute money to a Roth under the Act, although I only skimmed the actual legislation. The money that is eligible for contribution is money that DID NOT go into your retirement account at your employer, anyway. The money that got distributed directly into your company's retirement plan is already tax deferred and is not eligible.
You don't necessarily need Form 8935 to contribute to a Roth under the Act. If you received money from a stock distribution and/or a bond distribution due to NWA's bankruptcy that wasn't contributed to your employer's plan, that amount is eligible for contribution to a Roth. Vanguard or Fidelity (and I'm sure others) will open a Roth under the Act without Form 8935, with the correct amount to contribute under the Act being your responsibility. You can look on your old W2's from the appropriate years and you should see the amounts that are eligible.
You have 5 days left. If you're going to make a contribution, you have time, but not much. Hurry up!
RedRum
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I hear what you are saying about not necessarily having to have a Form 8935. Here is the form I just received from the Delta folks as to why I did not get Form 8935. I got this repsonse about a month ago and just putting it on here for other peoples' reference.
Here it is:
Thank you for your recent email to the Delta Employee Service Center.
NW has confirmed that although you did receive payment upon bankruptcy emergence, but you were not a participant in the defined benefit plans, and as such as not eligible for a form 8935.
Remember there were 2 parts to be eligible to roll the monies over to a Roth IRA: 1) You had to receive a payment as part of the bankruptcy related distribution and 2) were also defined benefit plan participants (which was another eligibility requirement).
Thank you for the opportunity to assist you today.
Should you have any additional questions or concerns regarding this or any other matter, please feel free to contact the Delta Employee Service Center.
We are here for you Monday-Friday / 8:00 am-5:00 pm (Eastern Time) by either dialing 1-800-MY DELTA (693-3582) or via email at esc.delta@delta.com.
Cordially,
OK, then why weren't you a member of your airlines DB program? Was it because you didn't meet the vesting requirements or something? Were you a new guy when your airline went through bankruptcy?
ualdriver
MILPILOT17
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If you didn't pay tax on the distribution before you deposited it into the regular IRA (don't know the specific situation under which you received the funds in question) then you will more than likely (again, don't know what tax category the funds fall under) have to pay tax on the distribution as you rollover the funds to a RIRA. What you have to consider is the tax on the money now vs. not having to pay taxes later on the distribution or the money the distribution generates over the next ? years. There are a number of websites available that deal with Roth IRA's which will allow you to make an educated choice.
Publication 590 has all the IRS rules concerning IRAs. Page 29 "Converting from any Traditional IRA into a Roth IRA" is the section that you are concerned with concerning rollovers from Traditional IRAs to Roth IRAs. Assuming you meet the 2 criteria listed there (income and filing status), you'll be able to do a rollover to a Roth. The part that constitutes your nondeductible contribution won't be taxed. Everything else will.
Now if you're trying to do this under this Airline Recovery Act (p. 66), I'm pretty certain that you CANNOT rollover qualified money (i.e. your Traditional IRA money) directly to a Roth funded under this act. You could put $5000 or $6000 (if you're 50 or over) for each you and your spouse like your normally can for a Roth (assuming you qualify), but I'm 95% sure you can't do it to fund a Roth under this act. The money has to come from somewhere else.
