I had my salary through 1042-S (tax treaty) that I entered as suggested in the miscellaneous incomes. Now I am paying 6% penalty for my ROTH IRA as no income is detected?

Turbotax says my income is $0 since does not detect it from the miscellaneous incomes that I had to add both in positive and negative values since I was paid under tax treaty. I contributed to my roth IRA last year but now I have to pay a penalty because it's higher than my wage. How can I avoid this issue?

526

Expert Alumni

Apr 11, 2025 3:37:14 PM

Yes, there is no earned income to claim the Roth contribution thus it is disallowed. You may withdraw this this by April 15 or leave in your account, pay the 6% penalty and wait until next year. If a Roth IRA contribution is allowed next year (or any future year), excess contributions can be applied up to the contribution limit for that year and no longer subject to the penalty.

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I had my salary through 1042-S (tax treaty) that I entered as suggested in the miscellaneous incomes. Now I am paying 6% penalty for my ROTH IRA as no income is detected?