Form 8880, Credit for Qualified Retirement Savings Contributions

About Form 8880

Form 8880 is used to claim the Credit for Qualified Retirement Savings Contributions, often called the saver's credit. It rewards lower and moderate income taxpayers who contribute to retirement accounts such as an IRA or an employer plan like a 401(k).

The credit is based on your eligible contributions and your income, and it directly reduces the tax you owe. Because it is a percentage of your contributions that phases out as income rises, the exact amount depends on your filing status and adjusted gross income.

To qualify you generally must meet age and dependency requirements and not be a full time student, as described in the instructions. The form calculates the credit from your contributions and income, so gather your retirement account records before completing it.

Who needs to complete it

• Lower and moderate income taxpayers who contributed to a retirement account.
• Workers who put money into an employer plan such as a 401(k) or 403(b).
• Individuals who contributed to a traditional or Roth IRA during the year.
• Eligible savers who want to reduce their tax with the saver's credit.

How to fill out Form 8880

1. 1Confirm you meet the eligibility rules for age, dependency, and student status.
2. 2Enter your eligible retirement contributions for the year for yourself and your spouse.
3. 3Subtract any recent distributions that reduce your eligible contributions as directed.
4. 4Enter your adjusted gross income from your tax return.
5. 5Use the form to find the credit rate that applies to your income and filing status.
6. 6Multiply your contributions by the rate to figure the credit, up to the limit.
7. 7Follow the line-by-line instructions on the official form to apply any credit limits.
8. 8Enter the credit on your tax return and attach the form.