Long-term disability income that you receive prior to the minimum retirement age under your employer’s plan and that is shown as taxable compensation in box 1 of Form W-2 is treated as earned income for purposes of contributing to an IRA or Roth IRA. Excludable disability income and Social Security benefits payable for disability are not treated as earned income for purposes of funding a Roth IRA.
IRA-type plan set up by an employer, rather than the employee. Salary-reduction contributions may be allowed to plans of small employers set up before 1997.