Disability payments allowed for IRA contributions?
What type of disability income payments are allowed to count as “earned income” and therefore are eligible to be used for a contribution to an IRA?
Thanks!
What type of disability income payments are allowed to count as “earned income” and therefore are eligible to be used for a contribution to an IRA?
Thanks!
Permalink Submitted by Alan Spross on Mon, 2008-03-31 20:48
The basic common denominator is that if the payments are reported on a W-2 (Box 1 less Box 11), they are eligible as taxable compensation. If reported on a 1099R, they are not.
The W-2 income is usually short term sick pay.