QUICK TAX FACTS

RETIREMENT PLAN CONTRIBUTION CREDIT
EGTRRA 2001, Form 8880

A nonrefundable credit is available for contributions to retirement savings plans.  The credit is in addition to the deduction (or income exclusion) of the contribution.           

The credit is equal to the applicable percentage (based on income and filing status), times qualified retirement plan contributions (not to exceed $2,000 of contributions).

Modified Adjusted Gross Income
Joint Return		Head of Household		All other cases		Applicable %
Over	Not over	Over	Not over	Over	Not over
$0	$30,000	$0	$22,500	$0	$15,000	50
30,000	32,500	22,500	24,375	15,000	16,250	20
32,500	50,000	24,375	37,500	16,250	25,000	10
50,000	--	37,500	--	25,000	--	0

 

Contributions to many plans qualify including: 

• traditional and Roth IRAs (rollovers excluded)
• 401(k)
• 403(b)
• governmental 457
• SEP or SIMPLE plan
• voluntary employee contributions to a qualified retirement plan as defined in section 4974(c) (including the federal Thrift Savings Plan)
• 501(c)(18)(D) plan

The contribution used to calculate the credit must be offset by certain retirement plan distributions (see form 8880 for exception details).

Contributions to a qualified retirement plan must be made by an eligible individual:

1. at least 18 years of age
2. not a dependent of another taxpayer
3. not a student (generally full time)

 

 

The information provided in this "Quick Tax Facts" section is intended as a general guideline only. For the most detailed and up-to-date information, contact us at 518-783-7200, or visit www.irs.gov.

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