Per the
IRS Instructions for Form 8880:
Who Can Take This Credit
You may be able to take this credit if you, or your spouse if filing jointly, made (a) contributions (other than rollover contributions) to a traditional or Roth IRA, (b) elective deferrals to a 401(k), 403(b), governmental 457(b), SEP, or SIMPLE plan, (c) voluntary employee contributions to a qualified retirement plan as defined in section 4974(c) (including the federal Thrift Savings Plan), or (d) contributions to a 501(c)(18)(D) plan.
However, you cannot take the credit if either of the following applies:
- The amount on Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37, is more than $31,000 ($46,500 if head of household; $62,000 if married filing jointly).
- The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 2000, (b) is claimed as a dependent on someone else’s 2017 tax return, or (c) was a student.
CAUTION! You will need to refigure the amount on Form 1040, line 38, if you are filing Form 2555, 2555-EZ, or 4563 or you are excluding income from Puerto Rico. See Pub. 590-A for details.
You were a student if during any part of 5 calendar months of 2017 you:
- Were enrolled as a full-time student at a school, or
- Took a full-time, on-farm training course given by a school or a state, county, or local government agency.
A school includes technical, trade, and mechanical schools. It does not include on-the-job training courses, correspondence schools, or schools offering courses only through the Internet.
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The contributions must be reduced by the amount of distributions you, and your spouse if filing jointly, received during the testing period from any IRA, plan, or annuity included under eligible contributions. Refer to IRS Publication 590-A, page 47, for additional information.
Per the instructions for Form 8880, the credit percentage is 50%, 20%, or 10% of the eligible contributions, depending on your adjusted gross income.
For the 50% rate:
- Married Filing Jointly - AGI not more than $37,000
- Head of Household - AGI not more than $27,750
- Single, Married Filing Separately, or Qualifying Widow(er) - AGI not more than $18,500
For the 20% rate:
- Married Filing Jointly - AGI between $37,001 to $40,000
- Head of Household - AGI between $27,751 to $30,000
- Single, Married Filing Separately, or Qualifying Widow(er) - AGI between $18,501 to $20,000
For the 10% rate:
- Married Filing Jointly - AGI between $40,001 to $62,000
- Head of Household - AGI between $30,001 to $46,500
- Single, Married Filing Separately, or Qualifying Widow(er) - AGI between $20,001 to $31,000
The credit is a nonrefundable credit (meaning it is limited by your tax liability), and may be reduced by other credits.