View Full Version : Credit for Qualified Retirement Contributions Question

enzowho
Hi, first post on the Kiplinger board. I have a question about the tax credit for qualified retirement savings contributions. Here is my situation.

I will be filling a joint return this year and my adjusted gross income is below $53000 limit. I contributed money to my Roth IRA in 2008, however my wife is a full time student. Am I eligible to take this credit? The account is an individual account in my name.

Since this is my first year filing a joint return, I guess my confusion lies in what the IRS means when they say "you". On a joint return does this really mean "you and your spouse" or will that be explicitly stated. Thanks for the help.
clydewolf
Enzowho,

Great question.

The answer is, It Depends.

From what you stated, you seem to qualify for the "Savers Credit" as determined on form 8880.

But do you need the credit? Because your wife is a full time student, you probably have education credits too.

Look at page 2 of your 1040 in the Non Refundable Credits section, lines 47 through 55. The credits are applied to your tax bill in the order they appear on the 1040.
It is possible other credits that come into play before line 51 will eliminate your tax. Once your tax bill is $0.00 because of the Non Refundable Credits, they are not available.
enzowho
Clydewolf,

Thanks, your post was most helpful. I really don't believe my tax bill will be $0, although that would be a very pleasant surprise.

Rich



Enzowho,

Great question.

The answer is, It Depends.

From what you stated, you seem to qualify for the "Savers Credit" as determined on form 8880.

But do you need the credit? Because your wife is a full time student, you probably have education credits too.

Look at page 2 of your 1040 in the Non Refundable Credits section, lines 47 through 55. The credits are applied to your tax bill in the order they appear on the 1040.
It is possible other credits that come into play before line 51 will eliminate your tax. Once your tax bill is $0.00 because of the Non Refundable Credits, they are not available.