VA Caregiver Stipend
We have a client who is getting $2800/mo stipend from the VA Caregiver program for taking care of his father. Does that count as earned income and allow him to make an IRA contribution?
We have a client who is getting $2800/mo stipend from the VA Caregiver program for taking care of his father. Does that count as earned income and allow him to make an IRA contribution?
Permalink Submitted by Alan - IRA critic on Tue, 2023-08-01 19:22
Yes, even though the payments are not taxable compensation, if the payments are designated as “difficulty of care” payments by the VA they are treated as taxable comp for IRA contribution purposes. One of the requirements is that the care must be provided in the client’s home. This is a Secure Act provision (Sec 116) for contributions made after 2019.