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

Residential rental property

Real property in which 80% or more of the gross income is from dwelling units. Under MACRS, depreciation is claimed over 27.5 years under the straight-line method.

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