Hi,
My wife retired in 2019. She earned a small amount of wages as a consultant in 2020. She also received a small bonus from her former employer (this was a year-end bonus for her work done in 2019, paid out in 2020). She made a Roth IRA contribution equal to the wages and bonus she received in 2020.
When I enter this information into TurboTax, it tells me the 1099-NEC amount (how her bonus was reported) is not eligible for her Roth IRA, and that she has over contributed in 2020.
I thought bonuses were considered earned income, and thus eligible for Roth IRA contributions. Which is correct?
Thanks for your help!
