A taxpayer may be able to take this contribution credit if he/she, or a spouse (if filing as Married Filing Jointly), made (1) contributions (other than roll-over contributions) to a traditional or Roth IRA, (2) elective deferrals to a 401(k) or 403(b) plan (including designated Roth contributions) or to a governmental 457, SEP, or SIMPLE plan, (3) voluntary employee contributions to a qualified retirement plan (including the federal Thrift Savings Plan), or (4) contributions to a 501(c)(18)(D) plan. Taxpayers who make elective contributions through an employer-offered program should consult with the employer to determine the nature of the plan.
However, taxpayers cannot take the credit if either of the following applies:
-The taxpayer’s Adjusted Gross Income (found on Line 38 of Form 1040) is greater than $28,750 ($43,125 if filing as Head of Household; $57,500 if filing as Married Filing Jointly).
-The person(s) who made the qualified contribution or elective deferral (1) was born after January 1, 1995, (2) is claimed as a dependent on someone else’s 2012 tax return, or (3) was a student1.
To calculate the amount of this credit, taxpayers should fill out Form 8880 and attach it to their Form 1040.
1defined as any person who was, during any part of at least five months of the tax year, (1) enrolled as a full-time student at a school2, or (2) took a full-time, on-farm training course given by a school or a state, county, or local government agency.
2A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet.
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