This tax form is used to claim the Credit for Qualified Retirement Savings Contributions. It's designed to encourage those with lower incomes to save for retirement. Eligible plans include:
- Traditional IRAs
- Thrift Savings Plan (TSP)
To be eligible for the credit, you must meet certain requirements, including:
- Being at least 18 years old.
- Not being a full-time student.
- Having adjusted gross income (AGI) below a certain limit, which is determined each year by the IRS. The specific income thresholds may vary depending on your filing status.
The credit amount is a percentage of the contributions you made to your eligible retirement savings plans during the tax year, up to a certain limit. The percentage ranges from 10% to 50%, depending on your income level and filing status. The maximum eligible contribution for the credit is $2,000 per taxpayer.
To claim the credit, report your IRA information under the "Credits and deductions" section in the filing flow of the app. We will help you determine whether or not you are eligible for the credit.