What are allowable income sources for an IRA Contr...
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michael-ratway
New Member

What are allowable income sources for an IRA Contribution?

Is interest from saving bonds or certificate of Deposit (CD) earned income?
2 Replies
DaveF1006
Employee Tax Expert

What are allowable income sources for an IRA Contribution?

No.  Savings Bonds and Certificate of Deposits are considered unearned income. Please view this IRS link for further details.

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dmertz
Level 15

What are allowable income sources for an IRA Contribution?

IRA contributions can only come from "compensation," generally income reported in box 1 of a W-2 (minus any amount in box 11) or net earnings from self employment (although there are a few other special-case sources of compensation).  Interest from any source is not compensation and does not support an IRA contribution.  For more details, see What is Compensation in IRS Pub 590-A:

https://www.irs.gov/publications/p590a#en_US_2019_publink1000230355

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