Hal_Al
Level 15

Education

No.  Although the refunded scholarship money is taxable income to your student-dependent, it is not earned income (compensation) for purposes of being eligible for an IRA contribution.

 

Although taxable scholarship is treated as earned income for purposes of the "kiddie tax" (taxed at the child's tax rate) and calculating the dependent's standard deduction, it is not earned income for an IRA.