Which taxpayers are eligible for the Retirement Savings Tax Credit?
This credit is available to taxpayers who make contributions to most retirement plans and is calculated on Form 8880. The IRS has approved the following retirement plans to qualify for retirement savings tax credit and these are as follows;
1. Traditional or Roth IRA's.
2. Elective deferrals to a 401(k), 403(b), governmental 457, SEP, or SIMPLE plan.
3. Voluntary employee contributions to a qualified retirement plan.
4. Contributions to a 501(c)(18)(d) plan.
However, a taxpayer would not be able to take the credit if either of the following applies:
1. The amount on Form 1040, line 38 or Form 1040A, line 22 is more than
$26,500 if filing single or married filing separately, or $29,750 if filing as head of household or $53,000 if filing jointly
2. The person who made the qualifying contribution or deferral was born after January 1, 1991, and was claimed as a dependent on someone else's tax return or was a student.