If a person is receiving severence pay paid out in 2002 but not otherwise gainfully employed, are that person & that person's spouse who is not employed eligible to make a 2002 IRA contributions? IRA contributions must be related to earned income which is usualy report to the goverment on a W2. Since you do not have earned income in 2002 the first answer would be no you can not contribute. But my guess is that your employer will report the severence payments as earned in 2002 on your w2. If they do, I think you can take the deduction.Your company can tell you now how they will report the payments now.
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