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Class action lawsuit

verny1028 — Tue, 24 Feb 2026 08:06:28 GMT

Good Morning

I received a check with a little over $800.00 from a class action lawsuit, my intention is to deposit it into my traditional IRA - my question is would I have any issue with the IRS since I'm trying to avoid any additional tax payment for this his year.

I do not have any issue with max amount in deposit since I have not deposit anything this year to my IRA.

Re: Class action lawsuit

Bsch4477 — Sun, 12 Nov 2023 17:15:54 GMT

There’s no problem with you using that payment as a contribution to your IRA.

The $800 is taxable unless the settlement was for physical harm, discrimination of any kind, loss of income, or devaluation of an investment.

Re: Class action lawsuit

dmertz — Sun, 12 Nov 2023 22:02:50 GMT

I assume that the payment has nothing to do with restoring value to investments in your IRA that were mishandled that would result in the deposit being a restorative payment to the IRA and that the payment was not a recovery of wages that had not been paid.

The $800 from the settlement is simply cash. To be eligible to contribute to an IRA you must have compensation from working and the contribution must be made in cash.