Disability income considered "earned income" for IRA?

[Omega]

I've searched and researched this and cannot seem to come to a definitive conclusion.

Client (H) is receiving disability payments. His W2 is minimal income, like $400. He contributed 6500 to 2018 IRA (he's over 50). Wife works and her income could cover spousal IRA. They had been MFJ.

Now appears to make sense to file MFS. So his income from dividends, gains, etc of course isn't "earned income," but I cannot seem to find an answer on whether the private disability payments is considered "earned income."

I say no, they are not "earned income" and if they MFS, he can't contribute to the IRA. Furthermore, the choice is MFJ and IRA or MFS and no IRA (plus he'll have to take it out or change the year if possible).

Thoughts? Thanks.

[TaxGuyBill]

the private disability payments is considered "earned income."

Private disability payments should be tax-free because the premiums were paid with after-tax money, right?

So if it is not taxable on the tax return, it definitely not be "taxable compensation" to qualify for an IRA.

[TAXNJ]

So his income from dividends, gains, etc of course isn't "earned income," but I cannot seem to find an answer on whether the private disability payments is considered "earned income."....

I say no, they are not "earned income" ...

Thoughts? Thanks.

Seems your comment is correct. Since you are looking for a reference, consider looking at this as a START of source reference:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/disability-and-earned-income-tax-credit

[Omega]

Thanks for the replies.