Yes, you can still contribute to a Roth IRA even if you receive In-Home Supportive Services (IHSS) payments that are excluded from your income, thanks to the SECURE Act of 2019. Here's why:
1. SECURE Act: This legislation explicitly allows individuals to treat excludable difficulty-of-care payments, like IHSS payments, as earned income for the purposes of calculating their Roth IRA contribution limits. This means those payments can count towards your income for determining how much you can contribute to a Roth IRA.
2. Income exclusion: While the IHSS payments are excluded from your taxable income, they still count as earned income for Roth IRA purposes thanks to the SECURE Act. This allows you to leverage that income for potential retirement savings.
3. Limits still apply: Remember, there are still income limits for Roth IRA contributions. In 2023, the maximum contribution is $6,000 for individuals under 50 and $7,000 for those 50 or older. If your adjusted gross income (AGI), including the excludable IHSS payments, exceeds the relevant limit, you cannot contribute to a Roth IRA
