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Wdumanski1
New Member

IRA contribution limitation

My granddaughter earned $3900 on a W2 but $16000 as unemployment money. The program says she can only contribute $3900 to her IRA. Does the unemployment money not count as income?

3 Replies
xmasbaby0
Level 15

IRA contribution limitation

No because it is not "earned" income.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
DavidD66
Expert Alumni

IRA contribution limitation

No, the unemployment benefits are not eligible for an IRA contribution.  Only "earned income" can be contributed to an IRA.  She can't use it to contribute to an IRA, but she didn't have to pay employment taxes (social security and Medicare) on it either, because it wasn't earned income.

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Wdumanski1
New Member

IRA contribution limitation

Thanks

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