Any of the following sources generally are considered eligible compensation for IRAs:
- Any amount shown in the Wages, tips and other compensation box on their W-2, minus any amount shown in the “Nonqualified Plans” box.
- Taxable military pay, as well as nontaxable combat pay
- Differential wage payments (wages paid by employers to employees who are on military active duty
- Any salary, wages, tips, professional fees, commissions and bonuses
- Certain net earnings from self-employment (after deducting retirement plan contributions and one-half self-employment taxes)
- Certain stipend, fellowship, and similar payments to graduate students in 2020 and later
- “Difficulty of care” payments (a type of qualified foster care payment) for purposes of making nondeductible contributions