Graduate Student Roth IRA Contribution

Forum|Forum|5 years ago
February 2, 2021
1 reply
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My understanding was that prior to 2020, graduate student stipends/fellowships were not viewed as eligible income for Roth IRA contributions, however that changed with H.R. 1865 and the Graduate Student Savings Act. However, TurboTax has not integrated this yet and thinks that I overcontributed to my Roth IRA, making me pay a 6% fee.

TurboTax Free Edition Online

sls50211

Level 9

To report stipend income in TurboTax, you must visit Deductions and Credits, Education Expenses section. You must answer all the questions, the taxable amount will be computed as the excess of your scholarship over the qualified education expenses.

Federal Taxes
Deduction & Credits
Scroll down to Education
Select Expenses and Scholarships
Follow the prompts… It will be somewhat confusing as you are answering the questions as if you claim an education credit… answer the initial questions and select that you did not receive form 1098-T. You will be asked for school’s name and address, just fill out the program information you are in... You will eventually see a screen "Did (your name) receive a scholarship or grant in 2020? Please enter your stipend in other Scholarships/Grants/Fellowships; this will ensure that the stipend is taxable on line 7 form 1040 as wages.

Once done, you may review your form 1040 and to verify that line 7 of the form looks correct. You may do so prior to paying for the program:

From My Account drop down, select Tools (you must be logged into your tax return)
Select View Tax Summary
Select Preview my 1040

poorgradstudent

Level 2

Hi, my fellowship stipend income is reported on a nec1099 not a 1040. This process ends double counting the income. Is there a workaround for the nec1099?

ThomasM125

Level 15

I don't know why the income would be double counted, unless you entered it in two different places in TurboTax. If you performed services to earn the income and it was reported on a form 1099-NEC, you need to enter it in the Self Employed Income and Expenses section TurboTax under Income and Expenses.

If you didn't perform services for the income and it is considered scholarship income, you need to enter it in the Education section under Deductions and Credits and then Expenses and Scholarships (Form 1098-T).

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