I'm a graduate student fortunate to receive a scholarship/fellowship grant from my institution that exceeds my tuition and qualified expenses. This results in a stipend that is deposited in my bank account. I would like to contribute some of this income to a Roth IRA. I entered my expected 1098-T information for 2022 in "Deductions & Credits > Expenses and Scholarships (Form 1098-T)" of TurboTax Premier Online, with Box 5 > Box 1 yielding taxable income. When I enter my Roth IRA contribution, TurboTax flags it as an excess contribution because my earned income is calculated as zero. How do I enter my 1098-T information so that TurboTax counts my stipend income toward a Roth IRA contribution?
I'm aware that scholarships/fellowships/stipends were historically not considered "earned income" and therefore could not be contributed to an IRA. But this exception was eliminated due to a 2019 law. Table 1-1 Compensation for Purposes of an IRA in IRS Publication 590-A (2021) was updated in 2022 to include "taxable non-tuition fellowship and stipend payments" in support of graduate or postdoctoral study.
