26 U.S.C. § 219: Retirement savings

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. the deductible amount, or an amount equal to the compensation includible in the individual’s gross income for such taxable year. This section shall not apply with respect to an employer contribution to a simplified employee pension. $7,000, or 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. This section shall not apply with respect to any amount contributed to a simple retirement account established under section 408(p). The deductible amount is $5,000. 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. For purposes of clause (i), the applicable amount is $1,000. such dollar amount, multiplied by 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. 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. such dollar amount, multiplied by 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. the dollar amount in effect under subsection (b)(1)(A) for the taxable year, or the compensation includible in such individual’s gross income for the taxable year, plus the amount allowed as a deduction under subsection (a) to such spouse for such taxable year, the amount of any designated nondeductible contribution (as defined in section 408( o )) on behalf of such spouse for such taxable year, and the amount of any contribution on behalf of such spouse to a Roth IRA under section 408A for such taxable year. such individual files a joint return for the taxable year, and 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. 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). 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. 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)). 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 any amount contributed on behalf of any individual to a plan described in section 501(c)(18). 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. 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. 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). 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. the amount of such excess, or the amount of the excess contributions for such taxable year (determined under section 4973(b)(2) without regard to subparagraph (C) thereof). shall be determined without regard to this paragraph, and shall not include any rollover contribution. 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. 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. For election not to deduct contributions to individual retirement plans, see section 408( o )(2)(B)(ii). 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). the taxpayer’s adjusted gross income for such taxable year, over the applicable dollar amount, bears to $10,000 ($20,000 in the case of a joint return). No dollar limitation shall be reduced below $200 under paragraph (1) unless (without regard to this subparagraph) such limitation is reduced to zero. Any amount determined under this paragraph which is not a multiple of $10 shall be rounded to the next lowest $10. after application of sections 86 and 469, and without regard to sections 85(c), 135, 137, 221, and 911 or the deduction allowable under this section. In the case of a taxpayer filing a joint return, $80,000. In the case of any other taxpayer (other than a married individual filing a separate return), $50,000. In the case of a married individual filing a separate return, zero. file separate returns for any taxable year, and live apart at all times during such taxable year, a plan described in section 401(a) which includes a trust exempt from tax under section 501(a), an annuity plan described in section 403(a), 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, an annuity contract described in section 403(b), a simplified employee pension (within the meaning of section 408(k)), or any simple retirement account (within the meaning of section 408(p)), or who makes deductible contributions to a trust described in section 501(c)(18). 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. who is a participant in a plan described in subparagraph (A)(iii) of paragraph (5) based on his activity as a volunteer firefighter, and 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). the applicable dollar amount under paragraph (3)(B)(i) shall be $150,000; and the amount applicable under paragraph (2)(A)(ii) shall be $10,000. such dollar amount, multiplied by 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. Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 408 and 408A of this title] shall apply to contributions made for taxable years beginning after December 31, 2019 . The amendment made by subsection (b) [amending section 408 of this title ] shall apply to distributions made for taxable years beginning after December 31, 2019 .” Except as provided in subparagraph (B), the amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after December 31, 1987 . A taxpayer may elect to have the amendment made by paragraph (1) apply to any taxable year beginning in 1987.” Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 402, 404, 408, 415, 3121, and 3306 of this title] shall apply to years beginning after December 31, 1986 . Subparagraphs (D) and (E) of section 408(k)(3) of the Internal Revenue Code of 1954 (as in effect before the amendments made by this section) shall continue to apply for years beginning after December 31, 1986 , and before January 1, 1989 , except that employer contributions under an arrangement under section 408(k)(6) of the Internal Revenue Code of 1986 (as added by this section) may not be integrated under such subparagraphs.” Except as provided in paragraph (2), the amendments made by this section [amending this section and section 408 of this title ] shall apply to contributions made after December 31, 1984 . The amendment made by subsection (b) [amending section 6693 of this title ] shall apply to failures occurring after the date of the enactment of this Act [ July 18, 1984 ].” Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 71, 215, 682, 6676, and 7701 of this title] shall apply with respect to divorce or separation instruments (as defined in section 71(b)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by this section) executed after December 31, 1984 . The amendments made by this section shall also apply to any divorce or separation instrument (as so defined) executed before January 1, 1985 , but modified on or after such date if the modification expressly provides that the amendments made by this section shall apply to such modification. [Former] Section 215(c) of the Internal Revenue Code of 1986 (as amended by subsection (b)) and the amendments made by subsection (c) [amending section 6676 of this title ] shall apply to payments made after December 31, 1984 .” Except as provided in this subsection, the amendments made by this section [amending this section and sections 62, 72, 402, 403, 408, 409, 415, 2039, 2503, 2517, 3401, 4973, 6047, and 6652 of this title and repealing section 220 of this title ] shall apply to taxable years beginning after December 31, 1981 . For purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], any amount allowed as a deduction under section 220 of such Code (as in effect before its repeal by this Act) shall be treated as if it were allowed by section 219 of such Code. The amendment made by subsection (g)(3) [amending section 409 of this title ] shall apply to taxable years beginning after December 31, 1974 . The amendments made by subsections (g)(4) and (h)(3) [amending section 415 of this title ] shall apply to years after December 31, 1981 . The amendments made by subsections (d)(1) and (h)(4) [amending section 2039 of this title ] shall apply to the estates of decedents dying after December 31, 1981 . The amendments made by subsections (d)(2) and (h)(5) [amending sections 2503 and 2517 of this title] shall apply to transfers after December 31, 1981 .” In the case of any taxpayer with respect to whom compensation was excluded from gross income under section 112 of the Internal Revenue Code of 1986 for any taxable year beginning after December 31, 2003 , and ending before the date of the enactment of this Act [ May 29, 2006 ], any contribution to an individual retirement plan made on account of such taxable year and not later than the last day of the 3-year period beginning on the date of the enactment of this Act shall be treated, for purposes of such Code, as having been made on the last day of such taxable year. If the credit or refund of any overpayment of tax resulting from a contribution to which paragraph (1) applies is prevented at any time by the operation of any law or rule of law (including res judicata), such credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the 1-year period beginning on the date that such contribution is made (determined without regard to paragraph (1)). The period for assessing a deficiency attributable to a contribution to which paragraph (1) applies shall not expire before the close of the 3-year period beginning on the date that such contribution is made. Such deficiency may be assessed before the expiration of such 3-year period notwithstanding the provisions of any other law or rule of law which would otherwise prevent such assessment. For purposes of this subsection, the term ‘individual retirement plan’ has the meaning given such term by section 7701(a)(37) of such Code.” shall be treated as an active participant in a plan established for its employees by the United States for purposes of section 219(g) of the Internal Revenue Code of 1986, and shall be treated as an employee for purposes of chapter 1 of such Code. The provisions of subsection (a) shall apply to taxable years beginning after December 31, 1987 .”