Form 8880

Credit for Qualified Retirement Savings Contributions (8880)

To claim the credit, use Form 8880, “Credit for Qualified Retirement Savings Contributions.” Heads-up: For tax years prior to 2018, you can only claim the Savers Credit if you use form 1040A, 1040 or 1040NR (not supported in TurboTax) to file your federal tax return. Form 8880 is used to compute the credit for qualified retirement savings contributions, also known as the “Saver’s Credit.” This credit is designed to incentivize low- and moderate-income taxpayers to save for retirement, and disabled persons to build savings with ABLE accounts.


In 2002, if you make contributions to the Plan or to an IRA, you may be eligible for a tax credit, called the “saver’s credit.” This credit could reduce the federal income tax you pay dollar- for-dollar. It is a credit — a dollar-for-dollar reduction of tax liability. If the standard or itemized deductions or personal exemptions eliminate tax liability, you can’t claim the Saver’s Credit. Moreover, it can’t be carried forward to the next year.


What Is IRS Form 8880?
IRS Form 8880 reports contributions to qualified retirement savings accounts. Specifically, this form determines whether you qualify for the retirement saver’s credit and, if you do, how much money you can claim. The saver’s credit is a tax credit that’s available to certain individuals who make contributions to eligible retirement plans.
⦁ Individual retirement accounts (IRAs), both traditional and Roth
⦁ Employer-sponsored plans, such as 401(k)s
⦁ Achieving a Better Life (ABLE) accounts
If you make contributions to any of these accounts, you’re required to complete Form 8880 and submit it with your Form 1040 when filing your tax return.


KEY TAKEAWAYS
⦁ IRS Form 8880 calculates how much of a tax credit you may qualify for if you made contributions to an eligible retirement savings plan.
⦁ Eligible plans to which you can make contributions and claim the credit include traditional and Roth IRAs and 401(k), 457(b), and 403(b) plans.
⦁ You’ll need to calculate your adjusted gross income (AGI) for the year and add up your total retirement savings contributions to complete Form 8880.
⦁ Form 8880 can be printed out and filed with a paper return or completed electronically if you plan to file your taxes online.


Who Can File IRS Form 8880?
Anyone who plans to claim the saver’s credit on their taxes will need to complete Form 8880 and file it with their tax return. Not everyone is eligible for this credit, however, so even if you made retirement plan contributions, you may not need to complete this form.
To be eligible for the saver’s credit, you must:
⦁ Be at least 18 years old
⦁ Not be a student
⦁ Not be claimed as a dependent on another person’s tax return
If you meet those criteria, you can fill out Form 8880 to determine the tax credit you may be able to claim for your retirement plan contributions.


How to File IRS Form 8880
You can file Form 8880 by printing out a copy of the form and completing it, then mailing it to the IRS. If you prefer to file your taxes electronically, you can complete Form 8880 online. If you’re using online tax filing software, you can follow the prompts to enter the correct information and calculate the credit.
It’s helpful to understand how these calculations work, especially if you’re completing the form by hand. The one-page form is simple, but it does require that you enter specific information, including:
⦁ Total contributions to traditional IRA, Roth IRA, and ABLE accounts for the year (not including rollover amounts)
⦁ Total  elective deferrals to a 401(k) or another qualified employer plan
You also need to know your adjusted gross income (AGI), because this determines the percentage of the credit you can claim. The saver’s credit is worth 10%, 20%, or 50% of your:
Traditional or Roth IRA contributions
⦁ Elective salary deferral contributions to a 401(k),  403(b), governmental  457(b),  SARSEP, or SIMPLE plan
⦁ Voluntary after-tax employee contributions made to a qualified retirement plan (including the federal ⦁ Thrift Savings Plan) or 403(b) plan
⦁ 501(c)(18)(D) plan contributions
⦁ ABLE account contributions
The maximum credit you may qualify for if you’re a single filer. The maximum credit is $2,000 if you’re married and file a joint return.


Who Has to File Form 8880?
Anyone who intends to claim the saver’s credit on their taxes will need to file Form 8880; however, not everyone is eligible to receive the saver’s credit. That is determined by an individual’s income.
Who Is Eligible for the Saver’s Credit?
You are eligible for the saver’s credit if you are 18 or older, not claimed as a dependent on another person’s return, and not a student. If you meet these criteria, then your eligibility is determined based on your adjusted gross income (AGI).
What Is the Contribution Limit for a 401(k) Plan?
The contribution limit for a 401(k) plan is $19,500 in 2021. This increases to $20,500 in 2022. If you are aged 50 or older, you can contribute an additional $6,500.
The Bottom Line
Form 8880 reports your contributions to qualified retirement accounts. It is primarily used to determine whether you qualify for the retirement saver’s credit and, if you do, how much money you can claim. Saver’s credit applies to individual retirement accounts (IRAs), employer-sponsored plans, such as 401(k)s, and Achieving a Better Life (ABLE) accounts.
2021 Retirement Saver’s Credit Income Thresholds:

Form 8880

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