Page 79 - 2020 Publication 17

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Report it as explained in the Instructions for Union benefits and dues. Amounts deducted 2019 Disaster Retirement Plan Distributions
Schedule D (Form 1040). You can’t deduct a from your pay for union dues, assessments, and Repayments, and described in its instruc-
loss. contributions, or other payments to a union tions; the 2020 Form 8915-E, Qualified 2020
However, if you sold an item you held for in- can’t be excluded from your income. Disaster Retirement Plan Distributions and Re-
vestment, such as gold or silver bullion, coins, Strike and lockout benefits. Benefits paid payments (Use for Coronavirus-Related Distri-
or gems, any gain is taxable as a capital gain to you by a union as strike or lockout benefits, butions), and described in its instructions.
and any loss is deductible as a capital loss. including both cash and the fair market value of Modified AGI limit for traditional IRA contri-
Example. You sold a painting on an online other property, are usually included in your in- butions. For 2020, if you are covered by a re-
tirement plan at work, your deduction for contri-
auction website for $100. You bought the paint- come as compensation. You can exclude these butions to a traditional IRA is reduced (phased
benefits from your income only when the facts
ing for $20 at a garage sale years ago. Report clearly show that the union intended them as out) if your modified AGI is:
your gain as a capital gain as explained in the gifts to you.
Instructions for Schedule D (Form 1040). • More than $104,000 but less than
Scholarships and fellowships. A candidate Utility rebates. If you’re a customer of an elec- $124,000 for a married couple filing a joint
return or a qualifying widow(er),
tric utility company and you participate in the
for a degree can exclude amounts received as utility's energy conservation program, you may
a qualified scholarship or fellowship. A qualified receive on your monthly electric bill either: • More than $65,000 but less than $75,000
scholarship or fellowship is any amount you re- for a single individual or head of house-
ceive that’s for: • A reduction in the purchase price of elec- hold, or
• Tuition and fees to enroll at or attend an tricity furnished to you (rate reduction), or • Less than $10,000 for a married individual
educational institution; or • A nonrefundable credit against the pur- filing a separate return.
• Fees, books, supplies, and equipment re- chase price of the electricity. If you either live with your spouse or file a joint
quired for courses at the educational insti- The amount of the rate reduction or nonrefund- return, and your spouse is covered by a retire-
tution. able credit isn’t included in your income. ment plan at work but you aren’t, your deduc-
Amounts used for room and board don’t qualify tion is phased out if your modified AGI is more
than $196,000 but less than $206,000. If your
for the exclusion. See Pub. 970 for more infor- modified AGI is $206,000 or more, you can’t
mation on qualified scholarships and fellowship take a deduction for contributions to a tradi-
grants. tional IRA. See How Much Can You Deduct,
Payment for services. In most cases, you 9. later.
must include in income the part of any scholar- Modified AGI limit for Roth IRA contribu-
ship or fellowship that represents payment for tions. For 2020, your Roth IRA contribution
past, present, or future teaching, research, or limit is reduced (phased out) in the following sit-
other services. This applies even if all candi- Individual uations.
dates for a degree must perform the services to • Your filing status is married filing jointly or
receive the degree. qualifying widow(er) and your modified AGI
For information about the rules that apply to Retirement
a tax-free qualified tuition reduction provided to is at least $196,000. You can’t make a
Roth IRA contribution if your modified AGI
employees and their families by an educational Arrangements is $206,000 or more.
institution, see Pub. 970. • Your filing status is single, head of house-
Department of Veterans Affairs (VA) pay- (IRAs) hold, or married filing separately and you
ments. Allowances paid by the VA aren’t inclu- didn’t live with your spouse at any time in
ded in your income. These allowances aren’t 2020 and your modified AGI is at least
considered scholarship or fellowship grants. What’s New $124,000. You can’t make a Roth IRA con-
tribution if your modified AGI is $139,000
Prizes. Scholarship prizes won in a contest or more.
aren’t scholarships or fellowships if you don’t Coronavirus distributions. Recent legisla- • Your filing status is married filing sepa-
have to use the prizes for educational purpo- tion contains new rules that provide for tax-fa- rately, you lived with your spouse at any
ses. You must include these amounts in your in- vored withdrawals, income inclusion, and re- time during the year, and your modified
come on Schedule 1 (Form 1040), line 8, payments for individuals who were diagnosed AGI is more than zero. You can’t make a
whether or not you use the amounts for educa- with or suffered economic losses as a result of Roth IRA contribution if your modified AGI
tional purposes. the coronavirus. is $10,000 or more.
Sharing/gig economy. Generally, if you work See Coronavirus Distributions in Pub. 590-B See Can You Contribute to a Roth IRA, later.
in the gig economy or did gig work, you must in- for more information. 2021 modified AGI limits. You can find infor-
clude all income received from all jobs whether Contribution deadline extension. The 2019 mation about the 2021 contribution and AGI lim-
you received a Form 1099-K, Payment Card traditional and Roth IRA contribution deadline its in Pub. 590-A.
and Third-Party Network Transactions, or not. was extended to July 15, 2020.
See the Instructions for Schedule C (Form
1040) and the Instructions for Schedule SE Qualified disaster distributions. Special Reminders
(Form 1040). rules provide for tax-favored distributions from
Stolen property. If you steal property, you and repayments to certain retirement plans for Maximum age for making traditional IRA
taxpayers who suffered economic losses as a
must report its fair market value in your income result of certain disasters in tax years 2018, contributions repealed. For tax years begin-
in the year you steal it unless you return it to its 2019, and 2020. However, these disasters do ning after 2019, there is no age limit on making
rightful owner in the same year. not include major disasters declared only by contributions to your traditional IRA. For more
Transporting school children. Don’t include reason of COVID-19. information, see Pub. 590-A.
in your income a school board mileage allow- For your 2020 return, these qualified disas- Required minimum distributions (RMDs).
ance for taking children to and from school if ter distributions are those qualified disaster dis- For distributions required to be made after tax
you aren’t in the business of taking children to tributions reported on the 2020 Form 8915-C, year 2019, the age for the required beginning
school. You can’t deduct expenses for provid- Qualified 2018 Disaster Retirement Plan Distri- date for mandatory distributions is changed to
ing this transportation. butions and Repayments, and described in its age 72 for taxpayers reaching age 70 1 /2 after
instructions; the 2020 Form 8915-D, Qualified 2019.
Chapter 9 Individual Retirement Arrangements (IRAs) Page 75