Posted on | March 5, 2012 | 3 Comments
If you want a tax credit for retirement savings contributions, you might be able to get it if you already make eligible contributions to your company sponsored plan. It all is based on how old you are and how much you are earning.
How much you can get back
Should you be making eligible contributions to an IRA, 401k or another retirement plan, it might be possible to get a credit of as much as $1,000-$2,000 if you are married and filing together. The credit is based on a percent of the contribution amount. The lower your income, the higher the percentage you will be able to get back.
If you are single, you cannot make earn more than $28,250. If you are a head of household, you must make $42,375 or less. If you are married and filing jointly, you must make $56,500 or less.
Other eligibility requirements
In order to qualify for a credit, you must be at least 18, and you cannot have been a full time student within the past calendar year. In addition, you cannot be claimed as a dependent on anyone else’s return.
Form to use
In order to get the credit, make sure you use Form 8880, credit for qualified retirement savings contributions.
Getting a tax credit for retirement savings contributions is definitely worth the time and effort. First just figure out if you qualify. Than you just have to fill out the form, send it in, and you will have your tax credit shortly.