Roth IRA Contribution with 1098-T

Forum|Forum|3 years ago
April 3, 2023
3 replies
28 views

Hi all,

I received $5,000 as a living stipend in the form of a 1098-T. I want this income to be contributed to my Roth IRA, but I am not a graduate student or enrolled in the institution which gave me the 1098-T. None of this stipend was used for qualifying educational expenses. How do I report it so that I am able to contribute it to a Roth IRA?

Thanks!

KrisD15

Level 15

Please clarify,

a 1098-T is a form used by a school to report tuition (Box 1) and scholarships (Box5)

It does not seem correct for a school to issue a 1098-T to someone that is not enrolled.

Why would a school give you a stipend and/or a 1098-T if you were not enrolled?

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hk2000Author

Level 2

It was a summer research fellowship (at the undergraduate level). I am not sure why it was issued as a 1098-T instead of a different form, but that's all I've received from the university. Box 5 is $5,000. Box 1 is empty.

DanaB27

Employee Tax Expert

You cannot use the scholarship to make a Roth IRA contribution since you were an undergrad.

From Pub 590-A: "A scholarship or fellowship is generally taxable compensation only if it is in box 1 of your Form W-2, Wage and Tax Statement. However, for tax years beginning after 2019, 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."

For 2022 the total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than: