Determining the Amount of the Credit

Calculate the retirement savings contributions credit on Form 8880, Credit for Qualified Retirement Savings Contributions, and report the amount in Form 1040, Tax and Credits section.

The credit can be as low as 10% or as high as 50% of a maximum annual contribution of $2,000 per person depending on filing status and AGI.

Review the notes in Volunteer Resource Guide (Tab 5), Form 8880.

If the taxpayer meets the age and income requirements and a contribution was indicated on Form W-2 or IRA worksheet, Form 8880 will appear in the forms tree, highlighted in red. You will need to address a few fields before the return is complete. Go to the Volunteer Resource Guide, (Tab 5), Retirement Savings Contributions Credit, for software entries.