The “Deemed IRA” (also called a “Sidecar IRA”) was part of “The Economic Growth and Tax Reconciliation Act of 2001” (EGTRRA), although the concept has been around since the early 1980s. Basically, if your 401k plan adopts this provision of EGTRRA, for plan years beginning on or after January 1, 2003, a 401k plan may allow employees to make voluntary employee contributions to a “Deemed IRA,” which is a separate account established under the plan.
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