Amended 1986, 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(39)(A), struck out subsec. (h) which read as follows: “For failure to provide required reports, see section 6652(g).”
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1501(d)(1)(B), which directed that subsec. (g) be amended by substituting “6652(g)” for “6652(h)”, was executed by making the substitution in subsec. (h) to reflect the probable intent of Congress and the prior redesignation of former subsec. (g) as (h) by Pub. L. 99–514, § 1101(a)(1).
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1101(a)(1), redesignated former subsec. (g) as (h).
Cases: Orvis v. Commissioner, 788 F.2d 1406 (9th Cir. 1986); Foulkes v. Commissioner, 638 F.2d 1105 (7th Cir. 1981); Johnson v. Commissioner, 661 F.2d 53 (5th Cir. 1981)
(a) Allowance of deduction In the case of an individual, there shall be allowed as a deduction an amount equal to the qualified retirement contributions of the individual for the taxable year.
Amended 1976, 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), amended subsec. (a) generally, substituting in heading “Allowance of deduction” for “Deduction allowed” and in text “shall be allowed” for “is allowed”, allowed as a deduction an amount equal to the qualified retirement contributions of the individual for the taxable year, eliminated part of first sentence for allowance as a deduction amounts paid in cash for the taxable year by or on behalf of the individual for his benefit—(1) to an individual retirement annuity described in section 408(a), (2) for an individual retirement annuity described in section 408(b), or (3) for a retirement bond described in section 409 (but only if the bond is not redeemed within 12 months of the date of its issuance), covered in subsec. (e)(1) and (5) of this section, and eliminated second sentence respecting employer payments, covered in subsec. (f)(5) of this section.
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1501(b)(4)(B), substituted “for” for “during” after “paid in cash”.
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(b) Maximum amount of deduction
Amended 1976, 1978, 1980, 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), in heading substituted “Maximum amount of deduction” for “Limitations and restrictions”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), struck out par. (6) which set forth alternative deduction provisions which disallowed a deduction for the taxable year if the individual claimed the deduction allowed by section 220 for the taxable year.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated par. (7) as (2).
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 101(a)(10)(D), amended par. (7) generally, including provision requiring that paragraph (3) not apply with respect to employer contribution to a simplified employee pension.
- 1978 Pub. L. 95-600 Pub. L. 95–600, § 152(c), added par. (7).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1501(b)(4)(B), added par. (6).
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(1) In general The amount allowable as a deduction under subsection (a) to any individual for any taxable year shall not exceed the lesser of—
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), amended par. (1) generally, substituting “In general” for “Maximum deduction” in heading and in text provision for allowance of a deduction not to exceed the lesser of (A) $2,000, or (B) an amount equal to the compensation includible in the individual’s gross income for such taxable year, for provision for an amount not to exceed amount equal to 15 percent of the compensation includible in gross income for the taxable year, or $1,500, whichever is less.
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(A) the deductible amount, or
Amended 2001
- 2001 Pub. L. 107-16 Pub. L. 107–16, § 601(a)(1), substituted “the deductible amount” for “$2,000”.
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(B) an amount equal to the compensation includible in the individual’s gross income for such taxable year.
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(2) Special rule for employer contributions under simplified employee pensions This section shall not apply with respect to an employer contribution to a simplified employee pension.
Amended 1976, 1981, 1983, 1984, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1108(g)(2), amended par. (2) generally, substituting provision that this section shall not apply with respect to an employer contribution to a simplified employee pension for former provisions consisting of subpars. (A), (B), and (C) which set out detailed limits on deductibility of employer contributions.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1875(c)(6)(B), substituted “the dollar limitation in effect under section 415(c)(1)(A)” for “the $15,000 amount specified in subparagraph (A)(ii)”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 713(d)(2), substituted “not in excess of the limitation in effect under section 415(c)(1)(A)” for “not in excess of $15,000”.
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 103(c)(12)(A), inserted a close parenthesis after “allowable under paragraph (1)” in introductory provisions.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 312(c)(1), substituted “$15,000” for “$7,500”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated par. (7) as (2), substituted in heading “rules for employer contributions under” for “rules in case of”, substituted in subpar. (A) introductory text “an employee shall be allowed as a deduction under subsection (a) (in addition to the amount allowable under paragraph (1) an amount equal to the lesser of” for “the limitation under paragraph (1) shall be the lesser of”, inserted in subpar. (A)(i) “from such employer” before “includible” and substituted therein “without regard” for “with regard”, substituted in subpar. (A)(ii) “the amount contributed by such employer to the simplified employee pension and included in gross income (but not in excess of $7,500” for “the sum of—(I) the amount contributed by the employer to the simplified employee pension and included in gross income (but not in excess of $7,500), and (II) $1,500, reduced (but not below zero) by the amount described in subclause (I)”, and substituted in subpar. (B) “Paragraph (1) of this subsection and paragraph (1) of subsection (d)” for “Paragraphs (2) and (3)”. Former subsec. (b)(2) provisions which disallowed any deduction under subsec. (a) for an individual for the taxable year if for any part of such year (A) he was an active participant in (i) a plan described in section 401(a), (ii) an annuity plan described in section 403(a), (iii) a qualified bond purchase plan described in section 405(a), or (iv) a plan established for its employees by the United States, by a State or political subdivision thereof, or by an agency or instrumentality of any of the foregoing, or (B) amounts were contributed by his employer for an annuity contract described in section 403(b), are now covered by subsec. (e)(3) and (4) of this section.
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1901(a)(32), substituted “subdivision” for “division” after “State or political”.
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(3) Plans under section 501(c)(18) Notwithstanding paragraph (1), the amount allowable as a deduction under subsection (a) with respect to any contributions on behalf of an employee to a plan described in section 501(c)(18) shall not exceed the lesser of—
Amended 1981, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1109(b), added par. (3).
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1101(b)(2)(A), struck out par. (3), special rule for individual retirement plans, which read as follows: “If the individual has paid any qualified voluntary employee contributions for the taxable year, the amount of the qualified retirement contributions (other than employer contributions to a simplified employee pension) which are paid for the taxable year to an individual retirement plan and which are allowable as a deduction under subsection (a) for such taxable year shall not exceed—
“(A) the amount determined under paragraph (1) for such taxable year, reduced by
“(B) the amount of the qualified voluntary employee contributions for the taxable year.”
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), added pars. (3) and (4). Former pars. (3) to (5) redesignated subsec. (d)(1) to (3).
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(A) $7,000, or
(B) an amount equal to 25 percent of the compensation (as defined in section 415(c)(3)) includible in the individual’s gross income for such taxable year.
(4) Special rule for simple retirement accounts This section shall not apply with respect to any amount contributed to a simple retirement account established under section 408(p).
Amended 1978, 1980, 1981, 1984, 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1421(b)(1)(A), added par. (4).
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 529(b), struck out par. (4) which related to a deduction for qualified retirement savings of certain divorced individuals.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 422(d)(1), substituted “gross income under section 71 (relating to alimony and separate maintenance payments) by reason of a payment under a decree of divorce or separate maintenance or a written agreement incident to such a decree” for “gross income under paragraph (1) of section 71(a) (relating to decree of divorce or separate maintenance)”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), added pars. (3) and (4). Former pars. (3) to (5) redesignated subsec. (d)(1) to (3).
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 101(a)(14)(B), inserted “402(a)(7),” after “section 402(a)(5)”.
- 1978 Pub. L. 95-600 Pub. L. 95–600, § 156(c)(3), inserted “403(b)(8)” after “403(a)(4)”.
(5) Deductible amount For purposes of paragraph (1)(A)—
Amended 1976, 1981, 2001, 2006, 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(38)(C), redesignated subpar. (D) as (C) and struck out former subpar. (C) which related to catchup contributions for certain individuals for taxable years beginning before Dec. 31, 2009.
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 831(a), added subpar. (C) and redesignated former subpar. (C) as (D).
- 2001 Pub. L. 107-16 Pub. L. 107–16, § 601(a)(2), added par. (5).
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), added pars. (3) and (4). Former pars. (3) to (5) redesignated subsec. (d)(1) to (3).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
(A) In general The deductible amount is $5,000.
Amended 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(38)(A), amended subpar. (A) generally. Prior to amendment, subpar. (A) listed deductible amounts for taxable years 2002 to 2008 and thereafter.
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(B) Catch-up contributions for individuals 50 or older
(i) In general In the case of an individual who has attained the age of 50 before the close of the taxable year, the deductible amount for such taxable year shall be increased by the applicable amount.
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(ii) Applicable amount For purposes of clause (i), the applicable amount is $1,000.
Amended 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(38)(B), amended cl. (ii) generally. Prior to amendment, cl. (ii) listed applicable amounts for taxable years 2002 to 2006 and thereafter.
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(C) Cost-of-living adjustment
Amended 2006, 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(38)(C), redesignated subpar. (D) as (C) and struck out former subpar. (C) which related to catchup contributions for certain individuals for taxable years beginning before Dec. 31, 2009.
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 831(a), added subpar. (C) and redesignated former subpar. (C) as (D).
(i) In general In the case of any taxable year beginning in a calendar year after 2008, the $5,000 amount under subparagraph (A) shall be increased by an amount equal to—
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(I) such dollar amount, multiplied by
(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2007” for “calendar year 2016” in subparagraph (A)(ii) thereof.
Amended 2017
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 11002(d)(1)(S), substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.
(ii) Rounding rules If any amount after adjustment under clause (i) is not a multiple of $500, such amount shall be rounded to the next lower multiple of $500.
(iii) Indexing of catch-up limitation In the case of any taxable year beginning in a calendar year after 2023, the $1,000 amount under subparagraph (B)(ii) shall be increased by an amount equal to—
Amended 2022
- 2022 Pub. L. 117-328 Pub. L. 117–328 added cl. (iii).
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(I) such dollar amount, multiplied by
(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2022” for “calendar year 2016” in subparagraph (A)(ii) thereof.
If any amount after adjustment under the preceding sentence is not a multiple of $100, such amount shall be rounded to the next lower multiple of $100.
(c) Kay Bailey Hutchison Spousal IRA
Amended 1976, 1978, 1981, 1996, 2013
- 2013 Pub. L. 113-22 Pub. L. 113–22 substituted “Kay Bailey Hutchison Spousal IRA” for “Special rules for certain married individuals” in heading.
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1427(a), amended subsec. (c) generally, substituting present provisions for former provisions relating to special rules for certain married individuals which set out general provisions in par. (1) and a limitation in par. (2).
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), added subsec. (c). Former subsec. (c)(1) to (3) and (5) redesignated subsec. (f)(1), (2), (3)(A), and (6). Former subsec. (c)(4), which provided for participation in governmental plans by certain individuals, with subpars. (A) and (B) covering members of reserve components and volunteer firefighters, was struck out.
- 1978 Pub. L. 95-600 Pub. L. 95–600, § 157(a)(1), substituted “not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof)” for “not later than 45 days after the end of such taxable year”.
- 1978 Pub. L. 95-600 Pub. L. 95–600, § 703(c)(1), substituted “subsection (b)(2)(A)(iv)” for “subsection (b)(3)(A)(iv)” wherever appearing.
- 1978 Pub. L. 95-600 Pub. L. 95–600, § 157(b)(1), added par. (5).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1501(b)(4)(D), added par. (3).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1503(a), added par. (4).
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(1) In general In the case of an individual to whom this paragraph applies for the taxable year, the limitation of paragraph (1) of subsection (b) shall be equal to the lesser of—
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(A) the dollar amount in effect under subsection (b)(1)(A) for the taxable year, or
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(B) the sum of—
Amended 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1103(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “whose spouse has no compensation (determined without regard to section 911) for such taxable year,”.
(i) the compensation includible in such individual’s gross income for the taxable year, plus
(ii) the compensation includible in the gross income of such individual’s spouse for the taxable year reduced by—
Amended 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 302(c), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the compensation includible in the gross income of such individual’s spouse for the taxable year reduced by the amount allowed as a deduction under subsection (a) to such spouse for such taxable year.”
(I) the amount allowed as a deduction under subsection (a) to such spouse for such taxable year,
(II) the amount of any designated nondeductible contribution (as defined in section 408(o)) on behalf of such spouse for such taxable year, and
Amended 2000
- 2000 Pub. L. 106-554 Pub. L. 106–554 added subcl. (II) and redesignated former subcl. (II) as (III).
(III) the amount of any contribution on behalf of such spouse to a Roth IRA under section 408A for such taxable year.
Amended 2000
- 2000 Pub. L. 106-554 Pub. L. 106–554 added subcl. (II) and redesignated former subcl. (II) as (III).
(2) Individuals to whom paragraph (1) applies Paragraph (1) shall apply to any individual if—
Amended 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1501(b)(4)(C), inserted “For purposes of this section, the determination of whether an individual is married shall be made in accordance with the provisions of section 143(a)” after “community property laws”.
(A) such individual files a joint return for the taxable year, and
(B) the amount of compensation (if any) includible in such individual’s gross income for the taxable year is less than the compensation includible in the gross income of such individual’s spouse for the taxable year.
Amended 1983, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1108(g)(3), struck out “(determined without regard to so much of the employer contributions to a simplified employee pension as is allowable by reason of paragraph (2) of subsection (b))” after “for the taxable year”.
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 103(c)(1), substituted “the amount allowable as a deduction under subsection (a) for the taxable year (determined without regard to so much of the employer contributions to a simplified employee pension as is allowable by reason of paragraph (2) of subsection (b))” for “the amount allowed as a deduction under subsection (a) for the taxable year”.
(d) Other limitations and restrictions
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), in heading redesignated former subsec. (b) heading as subsec. (d) heading and inserted “Other” before “limitations”.
[(1) Repealed. Pub. L. 116–94, div. O, title I, § 107(a), Dec. 20, 2019, 133 Stat. 3148]
Amended 1981, 1983, 2019
- 2019 Pub. L. 116-94 Pub. L. 116–94, § 107(a), struck out par. (1). Text read as follows: “No deduction shall be allowed under this section with respect to any qualified retirement contribution for the benefit of an individual if such individual has attained age 70½ before the close of such individual’s taxable year for which the contribution was made.”
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 103(c)(2), substituted “Beneficiary must be under age 70½” for “Individuals who have attained age 70½” as par. (1) heading and, in text, substituted “qualified retirement contribution for the benefit of an individual if such individual has attained age 70½ before the close of such individual’s taxable year for which the contribution was made” for “qualified retirement contribution which is made for a taxable year of an individual if such individual has attained age 70½ before the close of such taxable year”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated former subsec. (b)(3) as par. (1), substituted as heading “Individuals who have attained age 70½” for “Contributions after age 70½” and in text “shall be allowed under this section” for “is allowed under subsection (a)”, “qualified retirement contribution” for “payment described in subsection (a)”, and “made for a taxable year of an individual if such individual has attained” for “made during the taxable year of an individual who has attained”.
(2) Recontributed amounts No deduction shall be allowed under this section with respect to a rollover contribution described in section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16).
Amended 1981, 1984, 1992, 2001
- 2001 Pub. L. 107-16 Pub. L. 107–16, § 641(e)(2), substituted “408(d)(3), or 457(e)(16)” for “or 408(d)(3)”.
- 1992 Pub. L. 102-318 Pub. L. 102–318 substituted “402(c)” for “402(a)(5), 402(a)(7)”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(6), substituted “or 408(d)(3)” for “405(d)(3), 408(d)(3), or 409(b)(3)(C)”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 313(b)(2), inserted reference to section 405(d)(3).
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated former subsec. (b)(4) as par. (2) and substituted “shall be allowed” for “is allowed”.
(3) Amounts contributed under endowment contract In the case of an endowment contract described in section 408(b), no deduction shall be allowed under this section for that portion of the amounts paid under the contract for the taxable year which is properly allocable, under regulations prescribed by the Secretary, to the cost of life insurance.
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated former subsec. (b)(5) as par. (3) and, as so redesignated, substituted “shall be allowed under this section” for “is allowed under subsection (a)” and “year which is properly allocable” for “year properly allocable”.
(4) Denial of deduction for amount contributed to inherited annuities or accounts No deduction shall be allowed under this section with respect to any amount paid to an inherited individual retirement account or individual retirement annuity (within the meaning of section 408(d)(3)(C)(ii)).
Amended 1982
- 1982 Pub. L. 97-248 Pub. L. 97–248 added par. (4).
(e) Qualified retirement contribution For purposes of this section, the term “qualified retirement contribution” means—
Amended 1981, 1983, 1984, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1101(b)(1), amended subsec. (e) generally, revising the definition of “qualified retirement contribution”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(8), struck out subpar. (C) which included a qualified bond purchase plan described in section 405(a) within term “qualified employer plan”, and redesignated subpar. (D) as (C).
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 103(c)(3)(A), redesignated subpar. (E) as (D). Former subpar. (D), which related to simplified employee pension (within the meaning of section 408(k)), was struck out.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), added subsec. (e) incorporating former provisions of subsecs. (a) and (b)(2) as pars. (1), and (3) and (4) and, among other changes, inserted provisions relating to a qualified employee pension.
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(1) any amount paid in cash for the taxable year by or on behalf of an individual to an individual retirement plan for such individual’s benefit, and
Amended 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(7), struck out concluding provision that for the purposes of the preceding sentence, the term “individual retirement plan” includes retirement bonds described in section 409 only if the bond was not redeemed within 12 months of its issuance.
(2) any amount contributed on behalf of any individual to a plan described in section 501(c)(18).
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(f) Other definitions and special rules
(1) Compensation For purposes of this section, the term “compensation” includes earned income (as defined in section 401(c)(2)). The term “compensation” does not include any amount received as a pension or annuity and does not include any amount received as deferred compensation. For purposes of this paragraph, section 401(c)(2) shall be applied as if the term trade or business for purposes of section 1402 included service described in subsection (c)(6). The term “compensation” includes any differential wage payment (as defined in section 3401(h)(2)). The term “compensation” shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.
Amended 1981, 1983, 1984, 1986, 1989, 2008, 2017, 2018, 2019
- 2019 Pub. L. 116-94 Pub. L. 116–94, § 106(a), inserted at end: “The term ‘compensation’ shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.”
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(55), substituted “term ‘compensation’ includes” for “term compensation includes”.
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 11051(b)(3)(C), struck out “The term ‘compensation’ shall include any amount includible in the individual’s gross income under section 71 with respect to a divorce or separation instrument described in subparagraph (A) of section 71(b)(2).” after “deferred compensation.”
- 2008 Pub. L. 110-245 Pub. L. 110–245 inserted at end “The term compensation includes any differential wage payment (as defined in section 3401(h)(2)).”
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7841(c)(1), inserted at end “For purposes of this paragraph, section 401(c)(2) shall be applied as if the term trade or business for purposes of section 1402 included service described in subsection (c)(6).”
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 301(b)(4), which directed that par. (1) be amended by substituting “paragraph (6)” for “paragraph (7)”, could not be executed because prior amendment by Pub. L. 99–514, § 1875(c)(4), see below, struck out language which included phrase “paragraph (7)”.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1875(c)(4), struck out “reduced by any amount allowable as a deduction to the individual in computing adjusted gross income under paragraph (7) of section 62” after “(as defined in section 401(c)(2))”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 529(a), inserted provision that “compensation” shall include any amount includible in the individual’s gross income under section 71 with respect to a divorce or separation instrument described in subparagraph (A) of section 71(b)(2).
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 103(c)(4), substituted “earned income (as defined in section 401(c)(2)) reduced by any amount allowable as a deduction to the individual in computing adjusted gross income under paragraph (7) of section 62” for “earned income as defined in section 401(c)(2)” and inserted provision that “compensation” does not include any amount received as a pension or annuity and does not include any amount received as deferred compensation.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated former subsec. (c)(1) as par. (1).
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(2) Married individuals The maximum deduction under subsection (b) shall be computed separately for each individual, and this section shall be applied without regard to any community property laws.
Amended 1981, 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1427(b)(1), substituted “subsection (b)” for “subsections (b) and (c)”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated former subsec. (c)(2) as par. (2) and, as so redesignated, substituted “deduction under subsections (b) and (c)” for “deduction under subsection (b)(1)”, and struck out provision that for purposes of this section, the determination of whether an individual is married shall be made in accordance with the provisions of section 143(a).
(3) Time when contributions deemed made For purposes of this section, a taxpayer shall be deemed to have made a contribution to an individual retirement plan on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof).
Amended 1981, 1983, 1984, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1101(a)(2), in amending par. (3) generally, reenacted existing provision without its subpar. “(A) Individual retirement plans” designation, and struck out subpar. (B) relating to time when contributions deemed made with respect to qualified employer or government plans.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 147(c), substituted “not including” for “including”.
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 103(c)(5), substituted “if the contribution is made on account of the taxable year which includes such last day and by April 15 of the calendar year” for “if the contribution is made by April 15 of the calendar year”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated former subsec. (c)(3) as subpar. (A) and, as so redesignated, added subpar. (A) heading “Individual retirement plans”, and “to an individual retirement plan” before “on the last day” in text, and added subpar. (B).
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[(4) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(39)(A), Dec. 19, 2014, 128 Stat. 4043]
Amended 1981, 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(39)(A), struck out par. (4). Text read as follows: “The Secretary shall prescribe regulations which prescribe the time and the manner in which reports to the Secretary and plan participants shall be made by the plan administrator of a qualified employer or government plan receiving qualified voluntary employee contributions.”
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), added par. (4).
(5) Employer payments For purposes of this title, any amount paid by an employer to an individual retirement plan shall be treated as payment of compensation to the employee (other than a self-employed individual who is an employee within the meaning of section 401(c)(1)) includible in his gross income in the taxable year for which the amount was contributed, whether or not a deduction for such payment is allowable under this section to the employee.
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated former provisions of subsec. (a) as par. (5), added par. (5) heading “Employer payments”, substituted “to an individual retirement plan shall be treated as payment of compensation to the employee” for “to such a retirement account, or for such a retirement annuity or retirement bond constitutes payment of compensation to the employee”, and “in the taxable year for which the amount was contributed” after “gross income”, and struck out “after the application of subsection (b)” after “under this section to the employee”.
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(6) Excess contributions treated as contribution made during subsequent year for which there is an unused limitation
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), redesignated former subsec. (c)(5) as par. (6), inserted “for contributions to an individual retirement plan” after “under this section” in subpar. (A), and struck out in subpar. (C) “or section 220” after “under this section”.
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(A) In general If for the taxable year the maximum amount allowable as a deduction under this section for contributions to an individual retirement plan exceeds the amount contributed, then the taxpayer shall be treated as having made an additional contribution for the taxable year in an amount equal to the lesser of—
(i) the amount of such excess, or
(ii) the amount of the excess contributions for such taxable year (determined under section 4973(b)(2) without regard to subparagraph (C) thereof).
(B) Amount contributed For purposes of this paragraph, the amount contributed—
(i) shall be determined without regard to this paragraph, and
(ii) shall not include any rollover contribution.
(C) Special rule where excess deduction was allowed for closed year Proper reduction shall be made in the amount allowable as a deduction by reason of this paragraph for any amount allowed as a deduction under this section for a prior taxable year for which the period for assessing deficiency has expired if the amount so allowed exceeds the amount which should have been allowed for such prior taxable year.
(7) Special rule for compensation earned by members of the Armed Forces for service in a combat zone. For purposes of subsections (b)(1)(B) and (c), the amount of compensation includible in an individual’s gross income shall be determined without regard to section 112.
Amended 1986, 2006
- 2006 Pub. L. 109-227 Pub. L. 109–227 added par. (7) and redesignated former par. (7) as (8).
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1102(f), added par. (7).
(8) Election not to deduct contributions For election not to deduct contributions to individual retirement plans, see section 408(o)(2)(B)(ii).
Amended 2006
- 2006 Pub. L. 109-227 Pub. L. 109–227 added par. (7) and redesignated former par. (7) as (8).
(g) Limitation on deduction for active participants in certain pension plans
Amended 1981, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1101(a)(1), added subsec. (g). Former subsec. (g) redesignated (h).
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(a), added subsec. (g).
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(1) In general If (for any part of any plan year ending with or within a taxable year) an individual or the individual’s spouse is an active participant, each of the dollar limitations contained in subsections (b)(1)(A) and (c)(1)(A) for such taxable year shall be reduced (but not below zero) by the amount determined under paragraph (2).
Amended 1996, 1997, 1998
- 1998 Pub. L. 105-206 Pub. L. 105–206, § 6005(a)(1)(A), inserted “or the individual’s spouse” after “individual”.
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 301(b)(1), struck out “or the individual’s spouse” after “an individual”.
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1427(b)(2), substituted “(c)(1)(A)” for “(c)(2)”.
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(2) Amount of reduction
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(A) In general The amount determined under this paragraph with respect to any dollar limitation shall be the amount which bears the same ratio to such limitation as—
(i) the excess of—
(I) the taxpayer’s adjusted gross income for such taxable year, over
(II) the applicable dollar amount, bears to
(ii) $10,000 ($20,000 in the case of a joint return).
Amended 1997, 1998, 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(38)(D), struck out “for a taxable year beginning after December 31, 2006” after “joint return”.
- 1998 Pub. L. 105-206 Pub. L. 105–206, § 6005(a)(2), made technical amendment to directory language of Pub. L. 105–34, § 301(a)(2). See 1997 Amendment note below.
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 301(a)(2), as amended by Pub. L. 105–206, § 6005(a)(2), inserted “($20,000 in the case of a joint return for a taxable year beginning after December 31, 2006)” after “$10,000”.
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(B) No reduction below $200 until complete phase-out No dollar limitation shall be reduced below $200 under paragraph (1) unless (without regard to this subparagraph) such limitation is reduced to zero.
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(C) Rounding Any amount determined under this paragraph which is not a multiple of $10 shall be rounded to the next lowest $10.
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(3) Adjusted gross income; applicable dollar amount For purposes of this subsection—
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(A) Adjusted gross income Adjusted gross income of any taxpayer shall be determined—
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(i) after application of sections 86 and 469, and
(ii) without regard to sections 85(c), 135, 137, 221, and 911 or the deduction allowable under this section.
Amended 1988, 1989, 1996, 1998, 2001, 2004, 2017, 2020, 2021
- 2021 Pub. L. 117-2 Pub. L. 117–2 inserted “85(c),” before “135”.
- 2020 Pub. L. 116-260 Pub. L. 116–260 struck out “222,” after “221,”.
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13305(b)(1), struck out “199,” after “137,”.
- 2004 Pub. L. 108-357 Pub. L. 108–357 inserted “199,” before “221”.
- 2001 Pub. L. 107-16 Pub. L. 107–16, § 431(c)(1), inserted “222,” after “221,”.
- 1998 Pub. L. 105-277 Pub. L. 105–277 inserted “221,” after “137,”.
- 1998 Pub. L. 105-206 Pub. L. 105–206, § 6018(f)(2), made technical amendment to directory language of Pub. L. 104–188, § 1807(c)(3). See 1996 Amendment note below.
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1807(c)(3), as amended by Pub. L. 105–206, § 6018(f)(2), inserted “, 137,” before “and 911”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7816(c)(1), made technical correction to directory language of Pub. L. 100–647, § 6009(c)(2), see 1988 Amendment note below.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 6009(c)(2), as amended by Pub. L. 101–239, § 7816(c)(1), substituted “sections 135 and 911” for “section 911”.
(B) Applicable dollar amount The term “applicable dollar amount” means the following:
Amended 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 301(a)(1), amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “The term ‘applicable dollar amount’ means—
“(i) in the case of a taxpayer filing a joint return, $40,000,
“(ii) in the case of any other taxpayer (other than a married individual filing a separate return), $25,000, and
“(iii) in the case of a married individual filing a separate return, zero.”
(i) In the case of a taxpayer filing a joint return, $80,000.
Amended 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(38)(E), added cls. (i) and (ii) and struck out former cls. (i) and (ii) which related to applicable dollar amounts for a taxpayer filing a joint return for taxable years 1998 to 2007 and thereafter and for any other taxpayer (other than a married individual filing a separate return) for taxable years 1998 to 2005 and thereafter, respectively.
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(ii) In the case of any other taxpayer (other than a married individual filing a separate return), $50,000.
Amended 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(38)(E), added cls. (i) and (ii) and struck out former cls. (i) and (ii) which related to applicable dollar amounts for a taxpayer filing a joint return for taxable years 1998 to 2007 and thereafter and for any other taxpayer (other than a married individual filing a separate return) for taxable years 1998 to 2005 and thereafter, respectively.
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(iii) In the case of a married individual filing a separate return, zero.
(4) Special rule for married individuals filing separately and living apart A husband and wife who—
(A) file separate returns for any taxable year, and
(B) live apart at all times during such taxable year,
shall not be treated as married individuals for purposes of this subsection.
Amended 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011(a)(1), inserted “and living apart” after “filing separately” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of a married individual filing a separate return for any taxable year, paragraph (1) shall be applied without regard to whether such individual’s spouse is an active participant for any plan year ending with or within such taxable year.”
(5) Active participant For purposes of this subsection, the term “active participant” means, with respect to any plan year, an individual—
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(A) who is an active participant in—
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(i) a plan described in section 401(a) which includes a trust exempt from tax under section 501(a),
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(ii) an annuity plan described in section 403(a),
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(iii) a plan established for its employees by the United States, by a State or political subdivision thereof, or by an agency or instrumentality of any of the foregoing,
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(iv) an annuity contract described in section 403(b),
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(v) a simplified employee pension (within the meaning of section 408(k)), or
(vi) any simple retirement account (within the meaning of section 408(p)), or
Amended 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1421(b)(1)(B), added cl. (vi).
(B) who makes deductible contributions to a trust described in section 501(c)(18).
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The determination of whether an individual is an active participant shall be made without regard to whether or not such individual’s rights under a plan, trust, or contract are nonforfeitable. An eligible deferred compensation plan (within the meaning of section 457(b)) shall not be treated as a plan described in subparagraph (A)(iii).
(6) Certain individuals not treated as active participants For purposes of this subsection, any individual described in any of the following subparagraphs shall not be treated as an active participant for any taxable year solely because of any participation so described:
(A) Members of reserve components Participation in a plan described in subparagraph (A)(iii) of paragraph (5) by reason of service as a member of a reserve component of the Armed Forces (as defined in section 10101 of title 10), unless such individual has served in excess of 90 days on active duty (other than active duty for training) during the year.
Amended 1994
- 1994 Pub. L. 103-337 Pub. L. 103–337 substituted “section 10101 of title 10” for “section 261(a) of title 10”.
(B) Volunteer firefighters A volunteer firefighter—
(i) who is a participant in a plan described in subparagraph (A)(iii) of paragraph (5) based on his activity as a volunteer firefighter, and
(ii) whose accrued benefit as of the beginning of the taxable year is not more than an annual benefit of $1,800 (when expressed as a single life annuity commencing at age 65).
(7) Special rule for spouses who are not active participants If this subsection applies to an individual for any taxable year solely because their spouse is an active participant, then, in applying this subsection to the individual (but not their spouse)—
Amended 1997, 1998
- 1998 Pub. L. 105-206 Pub. L. 105–206, § 6005(a)(1)(B), added par. (7) and struck out heading and text of former par. (7). Text read as follows: “In the case of an individual who is an active participant at no time during any plan year ending with or within the taxable year but whose spouse is an active participant for any part of any such plan year—
“(A) the applicable dollar amount under paragraph (3)(B)(i) with respect to the taxpayer shall be $150,000, and
“(B) the amount applicable under paragraph (2)(A)(ii) shall be $10,000.”
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 301(b)(2), added par. (7).
(A) the applicable dollar amount under paragraph (3)(B)(i) shall be $150,000; and
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(B) the amount applicable under paragraph (2)(A)(ii) shall be $10,000.
(8) Inflation adjustment In the case of any taxable year beginning in a calendar year after 2006, each of the dollar amounts in paragraphs (3)(B)(i), (3)(B)(ii), and (7)(A) shall be increased by an amount equal to—
Amended 2006, 2014, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(56), substituted “shall be” for “shall each be” in introductory provisions.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(38)(F), substituted “each of the dollar amounts in paragraphs (3)(B)(i), (3)(B)(ii), and (7)(A)” for “the dollar amount in the last row of the table contained in paragraph (3)(B)(i), the dollar amount in the last row of the table contained in paragraph (3)(B)(ii), and the dollar amount contained in paragraph (7)(A),” in introductory provisions.
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 833(b), added par. (8).
(A) such dollar amount, multiplied by
(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “calendar year 2005” for “calendar year 2016” in subparagraph (A)(ii) thereof.
Amended 2017
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 11002(d)(1)(S), substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.
Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000.