! also be — Instruction 8606 — Instructions for Form

CAUTION Contributions , earlier, and the Maximum Roth IRA

Contribution Worksheet).

Difficulty of care payments. For contributions for 2025, you may elect to increase the nondeductible IRA contribution limit by some or all of the amount of difficulty of care payments, which are a type of qualified foster care payment, received. For details, see 2025 Pub. 590-A.

Taxable compensation. Taxable compensation includes the following.

Wages, salaries, tips, etc. If you received a distribution from a nonqualified deferred compensation plan or nongovernmental section 457 plan that is included in box 1 of Form W-2 or in box 1 of Form 1099-NEC, don’t include that distribution in taxable compensation. The distribution should be shown in (a) box 11 of Form W-2, (b) box 12 of Form W-2 with code Z, or (c) box 15 of Form 1099-MISC. If it isn’t, contact your employer for the amount of the distribution.
Qualified disaster distributions (also known as qualified disaster recovery distributions).
Qualified birth or adoption distributions.
Emergency personal expense distributions.
Domestic abuse distributions.
Terminal illness distributions.

Any 2025 retirement plan distributions whose repay- ments are treated as rollovers. The term “any 2025 retirement plan distributions whose repayments are treated as rollovers” is used in line 19 of 2025 Form 8606

Nontaxable combat pay if you were a member of the U.S. Armed Forces.
Self-employment income. If you are self-employed (a sole proprietor or a partner), taxable compensation is your

Instructions for Form 8606 (2025) 5

net earnings from your trade or business (provided your personal services are a material income-producing factor) reduced by your deduction for contributions made on your behalf to retirement plans and the deductible part of your self-employment tax.

Alimony and separate maintenance pursuant to a divorce or separation agreement entered into before January 1, 2019, unless that agreement was changed after December 31, 2018, to expressly provide that alimony received isn’t included in the recipient’s income.
Certain non-tuition fellowship and stipend payments. For details, see Pub. 590-A.

See What Is Compensation? under Who Can Open a Traditional IRA? in chapter 1 of Pub. 590-A for details.