IRA Equity Act of 2005 Would Broaden Compensation Definition

December 15, 2005 – Sen. Frank Lautenberg (D-N.J.) has introduced the IRA Equity Act of 2005 (S. 2086), a bill that would allow workers compensation and disability insurance “wage replacement income” to be treated as compensation that qualifies a taxpayer to make Traditional or Roth IRA contributions.  In addition, “unused” compensation from the taxpayer’s (or spouse thereof) prior two taxable years could be considered for purposes of IRA contribution eligibility.