topic Savers Credit in Get your taxes done using TurboTax

Savers Credit

dhk678 — Sat, 07 Mar 2020 17:25:14 GMT

Can I claim the Saver's Credit for contributions to a Roth IRA if the funds for the credit are provided for as a gift from my parents?

Re: Savers Credit

DoninGA — Sat, 07 Mar 2020 17:28:10 GMT

Contributions to an IRA, Traditional or Roth, can only be made if you have taxable compensation. Gifts received are not taxable compensation and are not reported on a tax return.

Re: Savers Credit

dhk678 — Sat, 07 Mar 2020 17:47:42 GMT

So just to follow up; I am low income. I made about $26000 total last year working at a grocery store. My folks, God Bless them, gifted me $6000 to put into a Roth IRA since the living expenses where I live are too high for me to get the money from my own salary. You are saying that since the money came from my parents, and not my own compensation, I am not allowed to claim the Savers Credit?

Re: Savers Credit

DoninGA — Sat, 07 Mar 2020 18:09:26 GMT

@dhk678 wrote:

So just to follow up; I am low income. I made about $26000 total last year working at a grocery store. My folks, God Bless them, gifted me $6000 to put into a Roth IRA since the living expenses where I live are too high for me to get the money from my own salary. You are saying that since the money came from my parents, and not my own compensation, I am not allowed to claim the Savers Credit?

I am only saying that the tax code requires any contribution to an IRA must be from taxable compensation.

IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) Table 1-1. Compensation for Purposes of an IRA, page 6 - https://www.irs.gov/pub/irs-pdf/p590a.pdf#page=6