Our volunteer is working with Ryan, a taxpayer at the site. She has already determined that Ryan's filing status is Single, no one can claim him as a dependent, and he is 28 years old. Refer to the Volunteer Resource Guide, Retirement Savings Contributions Credit - Screening Sheet, as she determines if Ryan is eligible for the credit.
| VOLUNTEER SAYS | RYAN RESPONDS | |
| Ryan, I see from your Form W-2 that you contributed $1,500 to your employer's 401(k) plan. Did you make contributions to any other qualified plans, such as an IRA? | No, I put all my savings into the 401(k) because my employer matches it. | |
| That's a great benefit. Were you a full-time student during the tax year? | No, I've been out of school for several years. | |
| Well, it looks like you qualify for the credit. I will complete Form 8880 to see how much the credit will be. | Great! | |
| Did you receive any distributions from your retirement plan at any time this tax year or the last two years — or do you plan to take any distributions before the tax filing deadline? | Well, last year I took out a loan against my 401(k) to use as a down payment on a car. I've already paid it back through payroll deductions. Does that count? | |
| No, your loan isn't considered a distribution, so you'll get to use the full $1,500 contribution in the calculation of your credit. The credit will be a percentage of your contribution. It will reduce your amount of total tax, so you'll end up with a bigger refund. | I'll take every penny! | |