Retirement Savings Credit - Form 8880

Form 8880 is used to determine the amount of your retirement savings contributions credit that can be claimed in the present year. A taxpayer qualifies for the credit if: 

• They made contributions to a traditional or Roth IRA. The contribution should be any other that is not rollover contributions
• They made elective deferrals to a 401(k), 403(b), governmental 457, SEP, or SIMPLE plan 
• They made voluntary employee contributions towards a qualified retirement plan as stipulated by section 4974(c) (inclusive of the federal Thrift Savings Plan) 
• They made contributions to a 501(c)(18)(D) plan. 

The maximum credit should be $1,000 (for MFJ, it should be $2,000). This credit is nonrefundable. It therefore reduces your tax liability, but is not refunded in case the tax liability is already at zero. The following hinder taxpayers from claiming the retirement savings credit: 

1. The adjusted gross income exceeds 

• $30,000 if filing Single or MFS
• $45,000 if filing Head of Household
• $60,000 if filing MFJ

2. The individual(s) making the qualified contribution or elective deferral; 

• Was born after January 1, 1997
• Has been claimed as a dependent on another person’s present year tax return 
• Was a student. 

For the taxpayer, as well as on MFJ returns and for the spouse, the following amounts should be entered on the form: 

• Traditional IRA contributions for the current year 
• Roth IRA contributions for the current year 
• Elective deferrals to a 401(k) or 403(b) plan (inclusive of designated Roth Contributions stipulated in section 402A), or to a governmental 457, SEP or SIMPLE plan. 
• Voluntary employee contributions made to a qualified retirement plan as provided for in section 4974(c) (including the federal Thrift Savings Plan). 
• Contributions to a 501(c)(18)(D) plan. 

These amounts may be displayed in Form(s) W-2 Box 12. 

Instructions on How to enter Form 8880 in the tax program: 

• Go to the Main Menu of the Tax Return (Form 1040) 
• From the menu, select Credits Menu 
• Proceed to Retirement Savings Credit (8880) 

Additional Information:

Instructions for Form 8880, Credit for Qualified Retirement Savings Contributions

Publication 590, Individual Retirement Arrangements (IRAs)