June 22 deadline for Roth IRA contribution

[ualdriver]

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 [email protected].
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

 

[SOVT]

I placed the distribution in a regular IRA when I received them. If I open a Roth IRA now and roll the funds into it do I have to pay tax on the distribution?

Thanks

 

[MILPILOT17]

I placed the distribution in a regular IRA when I received them. If I open a Roth IRA now and roll the funds into it do I have to pay tax on the distribution?

Thanks

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.

 

[ualdriver]

I placed the distribution in a regular IRA when I received them. If I open a Roth IRA now and roll the funds into it do I have to pay tax on the distribution?

Thanks

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.