Savers Credit

[dhk678]

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? 

[DoninGA]

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.

[dhk678]

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?

[DoninGA]

---

@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