What is a qualified retirement plan for the retirement savings contribution credit on my tax return?
Friday, April 30th, 2010 at
8:24 pm
I am doing my taxes and I opened a traditional IRA. I want to do the retirement savings contribution credit but turbo tax is telling me I don’t qualify. I am retired and I do get a pension. Form 8880 says to enter any distributions received from a qualified retirement plan as defined in section 4974c. I don’t know if my pension is a qualified plan and is disqualifying this credit and I don’t know where to look up section 4974c. I am 65.
I am retired but I did work part time so my IRA is deductible.
I am not referring to the adjustments to gross income on line 32. I am referring to the credit on line 51.
Filed under: Retirement Planning
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When you are receiving a distribution from a pension plan or IRA, your contribution to an IRA is reduced by any amount you are receiving as a pension. This would be any distribution received by you (or your spouse) from any traditional or Roth IRA, 401k, 403b, governmental 457, 501(c)(18), SEP or SIMPLE plan and any qualified retirement plan. Distributions that do not qualify are non taxable distributions as the result of a rollover or a trustee-to-trustee transfer, a distribution related to a Roth IRA conversion, loans from a qualified employer plan treated as a distribution, distributions of excess contributions or deferrals, and distributions from a military retirement plan. This is a list of the most common ones that do not qualify.
In my case when I contribute to an IRA, my contribution amount for this credit is reduced by the amount of pension income my husband receives. Therefore I am not eligible to receive the credit since his pension is more than the amount I am eligible for on the credit.
See the form 8880 I have linked below for more information.
Laura H – H&R Block – Senior Tax Advisor 5
**This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided.
Since you are retired your contributions to the IRA are not tax deductible. So scratch that.
irs.gov will have the relevant sections you need.
Dear W: I am retired and I have been deducting my IRA contributions for probably 7 or 8 years. There are some restrictions and look at IRS Pub 590 for some guidance. In turbo tax try it both ways and see if you can get it to deduct your contributions.
This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor