Retirement Savings Contribution Credit

You may be able to take a nonrefundable tax credit of up to $1,000 ($2,000 if married filing jointly) for making eligible contributions to an employer sponsored retirement plan or to an IRA.

The retirement savings contribution credit is a percentage of the qualifying contributions, with the highest rate for taxpayers with the least income.

When can I not claim the retirement savings contribution credit?

You cannot claim the retirement savings contribution credit if any of the following applies:

1. the amount of your adjusted gross income is more than $25,000 ($37,500 if head of household, and $50,000 if married filing jointly)

2. you were under age 18 at the end of the tax year

3. you are claimed on another person's tax return

4. you were a full time student by IRS definition (any part of 5 calendar months of the tax year)

What are considered eligible contributions for the retirement savings contribution credit?

Eligible contributions include contributions to a traditional IRA or Roth IRA and salary reduction contributions to most employer sponsored retirement plans, not included Roth-designated accounts. Your eligible contributions may be reduced by certain taxable and nontaxable contributions made after in certain years and before the due date of your tax return.

How to claim the retirement savings contribution credit?

To claim the retirement savings contribution credit, complete the Form 8880, Credit for Qualified Retirement Savings Contributions, and enter the credit on line 53 of the tax form 1040.