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.
