Tax time is a stressful period for many individuals and couples. Many individuals are often not aware of some tax credits they may claim to help offset their tax liability. One such credit is the Credit for Qualified Retirement Savings Contributions, Internal Revenue Service (IRS) Form 8880. Filling out the form properly is vital to receiving the credit.
In the boxes provided, enter the amount of contributions you made to both traditional and Roth IRAs, excluding rollover contributions.
The amount entered on this section of the Form 8880 will include all elective deferrals to 401k, 403b and 402a plans, as well as governmental 457, SEP or SIMPLE plan. Voluntary contributions made by you to the qualified plans and contributions to a 501(c)(18)(D) plan are included on this line too.
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Lines 3 and 4
On line 3 of the form, add together the totals from lines 1 and 2. On line 4, enter the amount of distributions you have received from plans including traditional IRAs, Roth IRAs, 401k, 403b, governmental 457, 501(c)(18)(D), SEP or SIMPLE plans. You also need to include distributions from other qualified retirement plans, as defined by the tax law for the tax year in which you are claiming.
Lines 5 Through 7
Subtract the amount on line 4 from the amount on line 3 and enter it on line 5. If this amount is zero or less, enter zero. On line 6, enter the amount on line 5 or $2,000, whichever is smaller. On Line 7, enter the amounts from line 6, adding your spouse's line 6 to your line 6 if filing jointly. If this number is zero, you cannot take the credit.
Lines 8 Through 10
On line 8, enter an amount as found on your tax return. For Form 1040, use the amount from line 38, for Form 1040A, use the amount from line 22, or for Form 1040NR, use the amount from line 36. Using the table shown on Form 8880, enter the decimal that coincides with the correct amount from line 8 on line 9. If this decimal is a zero, you cannot take the credit. Multiply line 7 by line 9 and enter this amount on line 10.
On line 11, enter amounts as found on your tax return. This amount will be found on line 46 of Form 1040, line 28 on Form 1040A or line 44 of Form 1040NR.
Lines 12 and 13
On line 12, enter the total number of credits found on your tax return. The total of your credits will be found on lines 47 through 49 on Form 1040, lines 29 through 31 for Form 1040A, and lines 45 and 46 on Form 1040NR. Subtract line 12 from line 11 and enter this amount on line 13. If the amount is zero, you cannot take the credit.
On line 14, enter the amount from either line 10 or line 13 of this form or the amount from line 51 of Form 1040, line 32 of Form 1040A or line 47 of Form 1040NR. Enter the smallest of these amounts. This is your credit for qualified retirement savings contributions.