Is income from Federal Work-Study considered 'earned income' by IRS?

<p>S's package includes $3000 in work study. Assuming he finds a campus job and earns that much, is that income considered 'earned income' by IRS? In other words, can he save that money in a Roth IRA? I just want to get him started early. :)</p>

<p>Thanks</p>

<p>Yes. Work Study income IS considered taxable earned income by the IRS for tax purposes.</p>

<p>Work Study money is NOT factored into the equation for the following year on the FAFSA.</p>

<p>Why not a regular IRA? With college tax credits as well, he might get a check back from the IRS with all the deductions and credits?</p>

<p>If you are needy for financial aid, I don't see how you are able to contribute to a Roth or any pension plan.</p>

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Assuming he finds a campus job and earns that much, is that income considered 'earned income' by IRS? In other words, can he save that money in a Roth IRA? I just want to get him started early.

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<p>One would HOPE that this student uses his earned income from Work Study to cover COLLEGE COSTS. That is what work study is supposedly for.</p>

<p>You are right. That was more of a hypothetical question, just in case I am able to come up with the money to cover the cost of his books and misc expenses.</p>

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Why not a regular IRA? With college tax credits as well, he might get a check back from the IRS with all the deductions and credits?

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<p>Because if all he earns is $3,000 there is no tax anyway. Why would you put it in a traditional IRA to lower the tax? And the tax credits go on the parent's return. And if either the student or the parent have enough spare money to contribute some in a Roth on behalf of the parent where it will earn tax free forever, I say it's an excellent idea.</p>