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debjlala
New Member

Can pension income on a 1099-R without any income from a W2 be used to contribute to a traditional IRA for tax credit?

Turbo tax software lets me get tax credit in a traditional IRA of approx. 500.00 but I only have income from a pension plan on a 1099-R and I have conflicting information that you have to have income from W-2 income.  Am I able to use 1099-R income to contribute to IRA and receive tax credit?

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2 Replies
ChristinaS
Expert Alumni

Can pension income on a 1099-R without any income from a W2 be used to contribute to a traditional IRA for tax credit?

No.

Pension income is not compensation/ earned income. You cannot get a benefit for an IRA contribution or a saver's credit unless-

You are on disability and have not yet reached minimum retirement age. In this situation, your 1099-R is treated as earned income and taxed as wages.

Please look at your 1040. There's no way you have a deduction for an IRA contribution if there's no earned income on your return and your 1099-R is treated as retirement income. Are you married? Your spouse's earned income counts too.

debjlala
New Member

Can pension income on a 1099-R without any income from a W2 be used to contribute to a traditional IRA for tax credit?

Not married  No Spouse.  Why is your software calculating a traditional IRA tax credit of 2187.00 without W-2 earned income?
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