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Rev. date: 12/19/2016

Retirement Savings Contributions Credit

Tax Topic 610
If you make eligible contributions to certain eligible retirement plans or to an individual retirement arrangement (IRA), you may be able to take a tax credit. The amount of the saver's credit you can get is generally based on the contributions you make and your credit rate. For more information, refer to Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs), the instructions for Form 8880, Credit for Qualified Retirement Savings Contributions, and Do I Qualify for the Retirement Savings Contributions Credit? If you're eligible for the credit, your credit rate can be as low as 10% or as high as 50%, depending on your adjusted gross income. The lower your income (or joint income, if applicable), the higher the credit rate; your credit rate also depends on your filing status. These two factors will determine the maximum credit you can take. You're not eligible for the credit if your adjusted gross income exceeds a certain amount. Dependents and full-time students are also not eligible for the credit.
Use Form 8880 to determine the rate and amount of the credit. Enter the amount of the credit on Form 1040 or Form 1040-A, U.S. Individual Income Tax Return, or on Form 1040-NR, U.S. Nonresident Alien Income Tax Return. You can't use Form 1040-EZ, Income Tax Return for Single and Joint Filers With No Dependents, to claim this credit.