rjs
Level 15
Level 15

Get your taxes done using TurboTax

@Rick5010 

The term that the IRS, and the tax law, use for income to support an IRA contribution is "compensation," not earned income.


You are right that there is disagreement about this. Some experts say that jury duty pay can be treated as compensation that can be used as a basis for an IRA contribution (traditional or Roth), and some experts say it is not compensation. You can get expert opinions either way. The IRS has apparently never issued any guidance on the question.


TurboTax takes the safe, conservative position that jury duty pay is not compensation for the purpose of making an IRA contribution. That's not an error or a problem. It's a decision by the tax experts at TurboTax. I checked a professional tax software product that I use, from a different company, and it handles it the same way that TurboTax does. TurboTax is not going to "correct" it because there is nothing wrong.


You could report the $105 as wages instead of as jury duty pay, but you have no W-2 or any other documentation to justify reporting it as wages. If the IRS questions the Roth IRA contribution, it could end up being treated as an excess contribution, which would subject you to penalties. If you want to go to battle with the IRS over $105, you can do that. But I don't think it's worth the trouble and aggravation. If you pursue it to the point of becoming a test case, you would incur legal fees far in excess of $105.


My advice is to contact the custodian of your Roth IRA and tell them to return the money to you as a mistaken contribution or excess contribution. They have to return any earnings on the money, as well as the original amount of the contribution. You should get this done before the end of the year.