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Is alimony money received from pre 2019 divorce agreement earned income? And if not how did TurboTax software allow contribution to Roth when there was no earned entered

Note the pre 2019 agreement has not been modified. So ex husband gets to still deduct amount paid and sister pays taxes on alimony received. Retired with no additional income.
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2 Replies
rjs
Level 15
Level 15

Is alimony money received from pre 2019 divorce agreement earned income? And if not how did TurboTax software allow contribution to Roth when there was no earned entered

The requirement for a Roth IRA contribution is "compensation," not earned income. According to IRS Publication 590-A, taxable alimony from a pre-2019 divorce decree is considered compensation for the purpose of IRA contributions, including Roth IRA contributions.

 

Is alimony money received from pre 2019 divorce agreement earned income? And if not how did TurboTax software allow contribution to Roth when there was no earned entered

Taxable alimony is not "earned income", but it is "compensation" for purposes of contributing to an IRA. 

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