Is 1099-MISC taxable non-tuition stipend acceptable income for Roth IRA contribution?

rchancia · ‎February 5, 2021

I have a 1099-MISC with 20,090 of income from a taxable non-tuition stipend. I made less than $6000 in other W2 income. When I enter that I contributed $6000 to my Roth IRA in 2020 I am warned that I have made excess contributions and will face a penalty.

However:

H.R.1865 - Further Consolidated Appropriations Act, 2020 (116th Congress Public Law 94) Section 106 states:

SEC. 106. CERTAIN TAXABLE NON-TUITION FELLOWSHIP AND STIPEND 
                        PAYMENTS TREATED AS COMPENSATION FOR IRA 
                        PURPOSES.

    (a) In General.--Paragraph (1) of section 219(f) of the Internal 
Revenue Code of 1986 is amended by adding at the end the 
following: <<NOTE: Definition.>>  ``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.''.

    (b) <<NOTE: 26 USC 219 note.>>  Effective Date.--The amendment made 
by this section shall apply to taxable years beginning after December 
31, 2019.

Should I just ignore the warning of a penalty for excess contributions and proceed with filing, or is there some way I can indicate the 1099-MISC box 3 income is specifically a taxable non-tuition stipend? Or does TurboTax simply not recognize this recent amendment to the tax code?

Thanks!