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Establishing a Payroll Deduction IRA

Under a Payroll Deduction IRA, an employee establishes an IRA (either a Traditional IRA or a Roth IRA) with a financial institution. The employee then authorizes a payroll deduction for the IRA.

Your responsibility as an employer is simply to transmit the employee’s authorized deduction to the financial institution. In general, if you offer this arrangement to any employee, then you should offer it to all employees.

Page Last Reviewed or Updated: 25-Mar-2014