Does financial aid for R&B qualify you to open an IRA?

Paying for College
1

<p>My understanding is that to open a retirement account like an IRA, one has to have income. From reading IRS Publication 970, and hearing others talk about taxable income, financial aid used for R&B must be reported by the student as income.</p>

<p>Does this mean that the aforementioned income from financial aid can be used as a platform by which a student could open an IRA ?</p>

<p>Has anyone here done this?</p>

2

<p>The eligibility criteria for an IRA is “Taxable compensation”, not “Taxable income” Great question though</p>

3

<p>Hmmm…I thought it was “earned income”. Maybe someone on here is a tax expert…I sure know I’m not!!</p>

4

<p>While I’m sure many use the term “taxable compensation” and “earned income” interchangeably, there is a difference. The IRS clearly states that eligibility criteria is “taxable compensation”</p>

<p><a href=“http://www.irs.gov/pub/irs-pdf/p590.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p590.pdf&lt;/a&gt; (page 8)</p>

<p>So, room and board would not qualify</p>

5

<p>Guess there’s no way around getting that job. Thanks!</p>