2806914
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

Error in TurboTax handling of (new) Schedule 1 line 8r scholarship income for determining IRA contribution limits

it is April 9th and this is not fixed. And yes my stipend is reported on line 8r

DanaB27
Expert Alumni

Error in TurboTax handling of (new) Schedule 1 line 8r scholarship income for determining IRA contribution limits

During the IRA contribution interview, you will get a screen "How much of the taxable Scholarship was for Graduate or Post-Doctoral Studies". You will need to enter the amount that applies to it here.

 

"Certain non-tuition fellowship and stipend payments not reported to you on Form W-2 are treated as taxable compensation for IRA purposes. These amounts include taxable non-tuition fellowship and stipend payments made to aid you in the pursuit of graduate or postdoctoral study and included in your gross income under the rules discussed in chapter 1 of Pub. 970." (Pub 590-A)

 

 

 

 

@DNich 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Error in TurboTax handling of (new) Schedule 1 line 8r scholarship income for determining IRA contribution limits

Dana,

I am using the premier version of TurboTax. You stated "During the IRA contribution interview, you will get a screen "How much of the taxable Scholarship was for Graduate or Post-Doctoral Studies". You will need to enter the amount that applies to it here."  I do not see any prompt in the IRA section that asks about graduate studies. 

 

In the education section, under the 1098-T section, I checked the box graduate student, as directed by other advisors on this board.

 

There is also a prompt that says "did your aid include amounts not awarded for 2022 expenses?" I checked "no", because all of the award was for 2002.  

 

Then there is a prompt "did you pay for room and board with a scholarship or grant" - I said yes, because that is what my fellowship is for. How much ....was used to pay the expense, I inserted all of my taxable scholarship money here. 

 

However, I still cannot make an IRA contribution without getting a penalty, and on my state taxes the amount from schedule 1, line 8r transfers as unearned income. Which because I am a post-graduate fellow it should be earned income.

 

I have spend hours on this. I'm hoping you can help me.  

Error in TurboTax handling of (new) Schedule 1 line 8r scholarship income for determining IRA contribution limits

please ignore my last post - 5 minutes ago - I found the prompt you were referring to. I needed to say yes to the question "Do you have any excess Roth contributions" to get to this prompt.

Error in TurboTax handling of (new) Schedule 1 line 8r scholarship income for determining IRA contribution limits

Turbotax does not treat taxable non-tuition fellowship and stipend payments reported via a 1099-G correctly (i.e. not on a W-2), but HR Block does.  IRS Publication 590-a is absolutely crystal clear in stating for IRA purposes that "Compensation includes ... taxable non-tuition fellowship and stipend payments" and since 2019, "Taxable non-tuition fellowship and stipend payments. For tax years beginning after 2019, taxable non-tuition fellowship and stipend payments are treated as taxable compensation for the purpose of IRA contributions". 

I was on the phone with Turbotax support for over an hour, but they refused to admit this glaring error in their application and tried to force me to upgrade for a fee.

I re-entered everything into HR Block's application, which asked the proper questions and treated the 1099-G-reported fellowship grant as income for IRA contribution purposes.

I'm considering moving another five family member's tax preparation to HR Block as a result.

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question