On April 11, 2023, the IRS reminded individual taxpayers that they have until April 18, 2023, to make contributions to a traditional or Roth IRA for 2022. In addition, the IRS has reminded taxpayers whose salary deferrals exceed the 2022 limit that they must remove the excess deferral amount, plus any earnings, by April 15, 2023.
Note. An extension to file an income tax return does not extend the deadline to make IRA contributions or remove excess deferrals.
In addition, the IRS has reminded taxpayers whose salary deferrals exceed the 2022 limit ($20,500 for taxpayers under age 50) that they must remove the excess deferral amount, plus any earnings, from the account by April 15, 2023.
Note. An employer may correct a retirement plan with excess salary deferrals are not removed by April 15 using the Self-Correction or Voluntary Correction Programs.
Individuals who made salary deferral contributions to retirement plans of two or more different employers in 2022 are most at risk for exceeding the deferral limit. While employers are required to limit the salary deferrals for participants in plans of the same employer, individuals with multiple plans need to track the total of all their deferrals to avoid exceeding the deferral limit.
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