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Can my son contribute to a Roth IRA based on his taxable scholarship income?
My son has over $7,000 in taxable scholarship income. The income is being reported on line 1 on his 1040 (not reported on a W-2) on the dotted line next to line 1 with the notation SCH $7,000 (as per IRS pub 970 directions). The million dollar question is, can my son contribute to a ROTH IRA based on these taxable scholarships? His W-2 income from working is only about $700.
We have researched this topic and cannot come to a sure answer. Some of the research issues are that the IRS seems to now like to provide updated guidance on graduate students with fellowships. My son is not a grad student and does not have a fellowship. He just received much more scholarship money then the cost of his qualified educational expenses.
May 12, 2021
4:18 PM