Originally Posted by Photo Guy1
#1;I'm currently disabled and collecting SS Disability and Long-Term Disability from a third party insurance company. I'm 62 years young. My question is: Since my LTD from the third party insurance company is fully taxable (my employer paid the premiums), can I still contribute money into my Roth IRA?
#2; I have no other sources of earned income. I've also heard that once you reach minimum retirement age the IRS no longer considers LTD compensation as earned income. Can anyone offer some help on this? Thanks.
#1; I doubt that the disability payments will be considered "taxable compensation" for purposes of an IRA contribution. If your earned compensation for the year is less than the IRA contribution limit, your limit gets lowered. If you work part-time and earn $4k , that $4k becomes your contribution limit. If you don't have compensation, you can't contribute. The only non-work income that counts is alimony , not long-term disability. You can't contribute anything you earn that's excluded from taxable income, except for non-taxable combat pay.
#2;I guess you need to contact the IRS for sure