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July 11, 2024
Question

Private Non-taxable Long Term Disability Insurance and ROTH IRA contribution income limits

  • July 11, 2024
  • 1 reply
  • 0 views

Are payments from PLTD (Privately purchased Long Term Insurance) included in the Modified Adjusted Gross Income (MAGI)  used to determine the income limit for making IRA contributions?  For example, a couple has privately purchased  long term disability insurance with already taxed funds.  Any payments for a claim are therefore not taxable. The income limit is $240,000 for a married couple to make a ROTH IRA contribution.  That couple made $230,000 in the usual income and another $15,000 from PLTD.  Does the PLTD payment make that couple unable to contribute to their ROTH IRAs?

 

This question is similar to another one that I just posted, but I hope it is appropriate to post this one separately to avoid confusion between the issues.

 

Thank you in advance,

Greg

    1 reply

    Employee
    July 11, 2024

    The non taxable income is not included in the calculation of MAGI.