Common use of Contribution Eligibility Clause in Contracts

Contribution Eligibility. Regardless of your age, you may contribute to a Xxxx XXX if you (or, if you file a joint tax return, your spouse) received compensation during the year and if your modified adjusted gross income (MAGI) does not exceed the allowable limit of $191,000 (for 2014) or $193,000 (for 2015) if you are a married individual filing a joint income tax return, or $129,000 (for 2014) or $131,000 (for 2015) if you are a single individual. The MAGI limits listed above will be increased annually to reflect a cost-of- living adjustment, if any. You are responsible for determining your eligibility to make Xxxx XXX contributions. If you are a married individual who files a separate return, your MAGI must not exceed $10,000. For more information on determining your eligibility to contribute to a Xxxx XXX, consult your tax advisor, instructions to Form 1040 and/or IRS Publication 590-A. Definition of Compensation. Compensation includes wages, salaries, commissions, bonuses, tips, and other amounts received from providing personal services. If you are self-employed, your compensation is your “earned income.” Taxable alimony received under a valid divorce decree, separate maintenance agreement, or other valid court order is considered compensation. Nontaxable combat zone pay received by members of the armed forces is generally considered compensation. Compensation for purposes of making Xxxx XXX contributions includes differential wage payments made by some employers to employees who have been called to active duty. The IRS treats as compensation any amount properly shown on your Form W-2 as “wages, tips, and other compensation” reduced by the amount shown on that form as distributions from nonqualified plans. Compensation does not include investment earnings, pension or annuity income or other amounts you receive for which your services are not a material income-producing factor.