Submitted By: someone
Answered: April 6, 2021 11:31 pm

I receive disability from my employer, which is reported to me on Form W-2. Can I use this as a basis to make a Roth IRA contribution?

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.

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Tax Glossary

Itemized deductions

Items, such as interest, state and local income and sales taxes, charitable contributions, and medical deductions, claimed on Schedule A of Form 1040. Itemized deductions are subtracted from adjusted gross income to arrive at taxable income. The amount of itemized deductions is also subject to a reduction when adjusted gross income exceeds certain limits.

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