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tron1
Returning Member

Questions about the "Economic Impact Payments"

I have some questions about the "Economic Impact Payments".  The government's COVID stimulus money.

 

1)  Do they count as the type of income that allows me to make a Roth IRA contribution?

Those payments were my only income in 2021, besides unemployment compensation.  Can I contribute their total amount to my Roth IRA?

Here is what I received in 2021: 1/02/21 = $600 ; 3/30/21 = $1,400


2)  Are they taxable by localities (Cheltenham township, Pennsylvania)?

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3 Replies
JillS56
Expert Alumni

Questions about the "Economic Impact Payments"

The IRS uses your tax filing status and the adjusted gross income (AGI) from your latest tax return to determine your stimulus payment amount.  AGI limits are:  Single income limit is $75,000, Head of Household is $112,500 and Married Filing Joint is $150,000.  

 

On the 2021 return, the are only asking about the 3rd Stimulus payment which is the $1,400 per person which you should have received sometime in March 2021.  The payment you received 3/30/21 = $1,400 would be the 3rd Stimulus payment.

 

These payments are not taxable either on your federal or state return.   

 

 

tron1
Returning Member

Questions about the "Economic Impact Payments"

Unfortunately your reply doesn't answer my question.  Let me restate it.

 

In 2021 almost all of my only income was those stimulus payments and Unemployment Compensation from the state of Pennsylvania. 

 

Besides those I received ~$600 in January 2021 as salary for working in December 2020 plus $45 in dividends from some investments with Vanguard (money market funds).

 

Can I contribute anything to my Roth IRA for 2021?  If so how much?

 

Thank you for your time!

ThomasM125
Expert Alumni

Questions about the "Economic Impact Payments"

Your only earned income is the salary of $600, so that is the amount you can contribute to your IRA.

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