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Miscellaneous
What does the phrase Net Income Attributable (NIA) mean? Show
Net Income Attributable is a concept in the Internal Revenue Code for calculating the net gain or loss generated by an excess IRA contribution or for a Roth conversion or recharacterization. When an excess IRA contribution (Roth recharacterization) is removed, not only the excess contribution (or conversion) amount itself needs to be removed, but also any income that was generated by that contribution while it was in that account. If an IRA decreased in value while it contained an excess contribution, the loss that can be attributed to the excess contribution does not need to be removed from the account.
How do I calculate NIA? Show
Generally, individuals determine NIA by allocating to the contribution a pro rata portion of the net income (or loss) on the assets in the IRA during the period the IRA held the contribution. A negative NIA is permitted under this calculation for removal of excess contributions or recharacterizations.

The formula for calculating NIA is shown below:

If you would like to estimate the NIA for your IRA contribution, please click on the link below and complete the Net Attributable form as accurately as possible.

Net Attributable Form


Clarifications to NIA Method

In addition to considering transfers and recharacterizations in the NIA formula, the regulations make other clarifications as follows.
  • If an IRA is not valued on a daily basis, the fair market value at the beginning of the computation period is deemed to be the most recent, regularly determined, fair market value of the asset.
  • If an individual owns more than one IRA, the NIA calculation is performed on the IRA containing the excess contribution being returned, and the distribution must be made from that IRA.
  • If an IRA has received more than one regular contribution for a particular tax year, the last regular contribution (not transfer or rollover) made to the IRA is deemed to be the contribution that is distributed, and a single computation period applies.
  • In the case of a recharacterization of a contribution(s) where multiple contributions have been made, the IRA owner can choose (by date and by dollar amount, but not by specific assets) which contribution or portion thereof is to be recharacterized. If recharacterizing multiple contributions that were consecutive contributions in a series, only one NIA calculation is required using a computation period based on the first contribution in the series. If recharacterizing more than one contribution that is not part of a consecutive series, separate NIA calculations must be made on each.
  • NIA is based on the overall dollar value of the IRA, not on the return of specific assets.

For further questions on Net Income Attributable, please contact a Shareholder Services Representative at 800-422-1050, Monday through Friday between the hours of 8:00 a.m. and 6:00 p.m. Eastern time.

What are the IRS Regulations for calculating NIA? Show
The IRS provides the formula for calculating NIA in Treasury Regulation (Treas. Reg.) 1.408-11 (26 CFR 1.408-11).
What is the difference between qualified and nonqualified dividends? Show
For a dividend to be qualified, the mutual fund company must hold the shares for at least 61 days. If the shares are sold prior to 61 days and a dividend was paid during that time period, the dividend is considered nonqualified. Nonqualified dividends may be subject to your ordinary income tax rate. In addition, as a result of the Jobs and Growth Tax Relief Reconciliation Act of 2003, qualified dividends may receive the same low tax rates as long-term capital gain.