Question

Savers Credit

Forum|Forum|6 years ago
March 7, 2020
1 reply
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Can I claim the Saver's Credit for contributions to a Roth IRA if the funds for the credit are provided for as a gift from my parents?

DoninGA

Employee

Contributions to an IRA, Traditional or Roth, can only be made if you have taxable compensation. Gifts received are not taxable compensation and are not reported on a tax return.

D

dhk678Author

So just to follow up; I am low income. I made about $26000 total last year working at a grocery store. My folks, God Bless them, gifted me $6000 to put into a Roth IRA since the living expenses where I live are too high for me to get the money from my own salary. You are saying that since the money came from my parents, and not my own compensation, I am not allowed to claim the Savers Credit?

DoninGA

Employee

@dhk678 wrote:

So just to follow up; I am low income. I made about $26000 total last year working at a grocery store. My folks, God Bless them, gifted me $6000 to put into a Roth IRA since the living expenses where I live are too high for me to get the money from my own salary. You are saying that since the money came from my parents, and not my own compensation, I am not allowed to claim the Savers Credit?

I am only saying that the tax code requires any contribution to an IRA must be from taxable compensation.

IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) Table 1-1. Compensation for Purposes of an IRA, page 6 - https://www.irs.gov/pub/irs-pdf/p590a.pdf#page=6