I am a post-doctoral fellow paid not through a W2 but rather a 1099-G where I earn grant income that is reported on box 6 of the 1099-G. I pay estimated quarterly taxes each year to avoid the underpayment penalty to both IRS and to the state. However, when I input this into TurboTax, it always says I have made excess contributions to my IRA as it shows my eligible income is $0, which is incorrect and makes any contribution to my IRA in excess.
According to the new tax law that went into effect for 2020 (https://www.law.cornell.edu/uscode/text/26/219) see (F) (1) Compensation: ...."The term compensation shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study."
This means that the software needs to include 1099-G box 6 income earned as a result from a graduate or post-doctoral study as part of an individual's gross income that would count towards an IRA income contribution limit. Am I reading this correctly?
