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Can unemployed people contribute to an IRA?

To be eligible to contribute to an IRA account you must have compensation, which includes wages, salaries, commissions, self-employment income, alimony or separate maintenance, or nontaxable combat pay. Total compensation is not reduced by self-employment losses.

Rental income, dividends, interest, capital gain, pension, unemployment, or amounts you exclude from income, such as foreign earned income, are not considered compensation.

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