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I am 74 years old and receive a PBGC pension benefit due to…

Customer Question
I am 74 years...

I am 74 years old and receive a PBGC pension benefit due to my company bankruptcy with a "qualified pension plan" resulting ina PBGC takeover.

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

Can I open a Roth IRA and take the "Retirement savings Contribution Credit" with form 8880 using the taxable pension benefit compensation.

Accountant's Assistant: Is there anything else the Accountant should be aware of?

Married filing jointly with retired spouse and no other Income other than SS.

Submitted: 2 months ago.Category: Tax
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Answered in 5 minutes by:
12/20/2017
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 months ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,722
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 months ago

Unfortunately to open an IRA you must have earned income. You would not be allowed to open an IRA without wages or self employment income.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited.

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Customer reply replied 2 months ago
It sounds contradicting as I read the requirement for ira to be as you said, earned income, but for roth ira is says that "qualitied pension plan" income is eligible for the roth ira. Did I misinterpret the written dialog.
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 months ago

You have to have “earned” incomethat’s income you make from working, if you wish to contribute to a ROTH IRA or a TRAD IRA.

I do not know what you read but if you give me a link I will look at it.

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 months ago

I suspect it related to rollovers or conversions. Even if you did convert the pension to a ROTH IRA, that does not meet the eligibility for the Savings credit .

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 months ago

Hi just checking back to see if you responded again.

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