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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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.
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