Question

My income is received via a 1098-T (grad student stipend). I contributed to Roth IRA and Turbotax is saying I owe penalty because contribution exceeds income (it doesn't)

Forum|Forum|3 years ago
March 21, 2023
1 reply
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Can I just not include the Roth in turbotax?

TurboTax Premier Online

DoninGA

Employee

Income from an education loan is not compensation from work which is required to contribute to an IRA.

E

eibradyAuthor

As far as I can tell, that was previously correct until 2019 when the omnibus spending bill passed which now allows taxable fellowship/scholarship income to be applied toward IRA.

E

eibradyAuthor

From the IRS 590-A instructions for IRAs:

"However, for tax years beginning after 2019, certain non-tuition fellowship and stipend payments not reported to you on Form W-2 are treated as taxable compensation for IRA purposes. These amounts include taxable non-tuition fellowship and stipend payments made to aid you in the pursuit of graduate or postdoctoral study and included in your gross income under the rules discussed in chapter 1 of Pub. 970, Tax Benefits for Education.