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Stateincometaxform 4. Stateincometaxform   Retirement Savings Contributions Credit (Saver's Credit) Table of Contents What's New Introduction Full-time student. Stateincometaxform Adjusted gross income. Stateincometaxform Distributions received by spouse. Stateincometaxform Testing period. Stateincometaxform What's New Modified AGI limit for retirement savings contributions credit increased. Stateincometaxform  For 2013, you may be able to claim the retirement savings contributions credit if your modified AGI is not more than: $59,000 if your filing status is married filing jointly, $44,250 if your filing status is head of household, or $29,500 if your filing status is single, married filing separately, or qualifying widow(er). Stateincometaxform Introduction You may be able to take a tax credit if you make eligible contributions (defined later) to a qualified retirement plan, an eligible deferred compensation plan, or an individual retirement arrangement (IRA). Stateincometaxform You may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly). Stateincometaxform This credit could reduce the federal income tax you pay dollar for dollar. Stateincometaxform    Can you claim the credit?   If you make eligible contributions to a qualified retirement plan, an eligible deferred compensation plan, or an IRA, you can claim the credit if all of the following apply. Stateincometaxform You were born before January 2, 1996. Stateincometaxform You are not a full-time student (explained next). Stateincometaxform No one else, such as your parent(s), claims an exemption for you on their tax return. Stateincometaxform Your adjusted gross income (defined below) is not more than: $59,000 if your filing status is married filing jointly, $44,250 if your filing status is head of household, or $29,500 if your filing status is single, married filing separately, or qualifying widow(er). Stateincometaxform Full-time student. Stateincometaxform   You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government. Stateincometaxform You are a full-time student if you are enrolled for the number of hours or courses the school considers to be full time. Stateincometaxform Adjusted gross income. Stateincometaxform   This is generally the amount on line 38 of your 2013 Form 1040; line 22 of your 2013 Form 1040A; or line 37 of your 2013 Form 1040NR. Stateincometaxform However, you must add to that amount any exclusion or deduction claimed for the year for: Foreign earned income, Foreign housing costs, Income for bona fide residents of American Samoa, and Income from Puerto Rico. Stateincometaxform Eligible contributions. Stateincometaxform   These include: Contributions to a traditional or Roth IRA, Salary reduction contributions (elective deferrals, including amounts designated as after-tax Roth contributions) to: A 401(k) plan (including a SIMPLE 401(k)), A section 403(b) annuity, An eligible deferred compensation plan of a state or local government (a governmental 457 plan), A SIMPLE IRA plan, or A salary reduction SEP, and Contributions to a section 501(c)(18) plan. Stateincometaxform They also include voluntary after-tax employee contributions to a tax-qualified retirement plan or section 403(b) annuity. Stateincometaxform For purposes of the credit, an employee contribution will be voluntary as long as it is not required as a condition of employment. Stateincometaxform Reducing eligible contributions. Stateincometaxform   Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period (defined later) from any IRA, plan, or annuity included above under Eligible contributions. Stateincometaxform Also reduce your eligible contributions by any distribution from a Roth IRA that is not rolled over, even if the distribution is not taxable. Stateincometaxform   Do not reduce your eligible contributions by any of the following. Stateincometaxform The portion of any distribution which is not includible in income because it is a trustee-to-trustee transfer or a rollover distribution. Stateincometaxform Distributions that are taxable as the result of an in-plan rollover to your designated Roth account. Stateincometaxform Any distribution that is a return of a contribution to an IRA (including a Roth IRA) made during the year for which you claim the credit if: The distribution is made before the due date (including extensions) of your tax return for that year, You do not take a deduction for the contribution, and The distribution includes any income attributable to the contribution. Stateincometaxform Loans from a qualified employer plan treated as a distribution. Stateincometaxform Distributions of excess contributions or deferrals (and income attributable to excess contributions and deferrals). Stateincometaxform Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k). Stateincometaxform Distributions from an eligible retirement plan that are converted or rolled over to a Roth IRA. Stateincometaxform Distributions from a military retirement plan. Stateincometaxform Distributions from an inherited IRA by a nonspousal beneficiary. Stateincometaxform Distributions received by spouse. Stateincometaxform   Any distributions your spouse receives are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit. Stateincometaxform Testing period. Stateincometaxform   The testing period consists of the year for which you claim the credit, the period after the end of that year and before the due date (including extensions) for filing your return for that year, and the 2 tax years before that year. Stateincometaxform Example. Stateincometaxform You and your spouse filed joint returns in 2011 and 2012, and plan to do so in 2013 and 2014. Stateincometaxform You received a taxable distribution from a qualified plan in 2011 and a taxable distribution from an eligible deferred compensation plan in 2012. Stateincometaxform Your spouse received taxable distributions from a Roth IRA in 2013 and tax-free distributions from a Roth IRA in 2014 before April 15. Stateincometaxform You made eligible contributions to an IRA in 2013 and you otherwise qualify for this credit. Stateincometaxform You must reduce the amount of your qualifying contributions in 2013 by the total of the distributions you received in 2011, 2012, 2013, and 2014. Stateincometaxform Maximum eligible contributions. Stateincometaxform   After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person. Stateincometaxform Effect on other credits. Stateincometaxform   The amount of this credit will not change the amount of your refundable tax credits. Stateincometaxform A refundable tax credit, such as the earned income credit or the refundable amount of your child tax credit, is an amount that you would receive as a refund even if you did not otherwise owe any taxes. Stateincometaxform Maximum credit. Stateincometaxform   This is a nonrefundable credit. Stateincometaxform The amount of the credit in any year cannot be more than the amount of tax that you would otherwise pay (not counting any refundable credits) in any year. Stateincometaxform If your tax liability is reduced to zero because of other nonrefundable credits, such as the credit for child and dependent care expenses, then you will not be entitled to this credit. Stateincometaxform How to figure and report the credit. Stateincometaxform   The amount of the credit you can get is based on the contributions you make and your credit rate. Stateincometaxform Your credit rate can be as low as 10% or as high as 50%. Stateincometaxform Your credit rate depends on your income and your filing status. Stateincometaxform See Form 8880 to determine your credit rate. Stateincometaxform   The maximum contribution taken into account is $2,000 per person. Stateincometaxform On a joint return, up to $2,000 is taken into account for each spouse. Stateincometaxform   Figure the credit on Form 8880. Stateincometaxform Report the credit on line 50 of your Form 1040; line 32 of your Form 1040A; or line 47 of your Form 1040NR and attach Form 8880 to your return. Stateincometaxform Prev  Up  Next   Home   More Online Publications
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Historical Highlights of the IRS

1862 - President Lincoln signed into law a revenue-raising measure to help pay for Civil War expenses. The measure created a Commissioner of Internal Revenue and the nation's first income tax. It levied a 3 percent tax on incomes between $600 and $10,000 and a 5 percent tax on incomes of more than $10,000.

1867 - Heeding public opposition to the income tax, Congress cut the tax rate. From 1868 until 1913, 90 percent of all revenue came from taxes on liquor, beer, wine and tobacco.

1872 - Income tax repealed.

1894 - The Wilson Tariff Act revived the income tax and an income tax division within the Bureau of Internal Revenue was created.

1895 - Supreme Court ruled the new income tax unconstitutional on the grounds that it was a direct tax and not apportioned among the states on the basis of population. The income tax division was disbanded.

1909 - President Taft recommended Congress propose a constitutional amendment that would give the government the power to tax incomes without apportioning the burden among the states in line with population. Congress also levied a 1 percent tax on net corporate incomes of more than $5,000.

1913 - As the threat of war loomed, Wyoming became the 36th and last state needed to ratify the 16th Amendment. The amendment stated, "Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." Later, Congress adopted a 1 percent tax on net personal income of more than $3,000 with a surtax of 6 percent on incomes of more than $500,000. It also repealed the 1909 corporate income tax. The first Form 1040 was introduced.

1918 - The Revenue Act of 1918 raised even greater sums for the World War I effort. It codified all existing tax laws and imposed a progressive income-tax rate structure of up to 77 percent.

1919 - The states ratified the 18th Amendment, barring the manufacture, sale or transport of intoxicating beverages. Congress passed the Volstead Act, which gave the Commissioner of Internal Revenue the primary responsibility for enforcement of Prohibition. Eleven years later, the Department of Justice assumed primary prohibition enforcement duties.

1931 - The IRS Intelligence Unit used an undercover agent to gather evidence against gangster Al Capone. Capone was convicted of tax evasion and sentenced to 11 years.

1933 - Prohibition repealed. IRS again assumed responsibility for alcohol taxation the following year and for administering the National Firearms Act. Later, tobacco tax enforcement was added.

1942 - The Revenue Act of 1942, hailed by President Roosevelt as "the greatest tax bill in American history," passed Congress. It increased taxes and the number of Americans subject to the income tax. It also created deductions for medical and investment expenses.

1943 - Congress passed the Current Tax Payment Act, which required employers to withhold taxes from employees' wages and remit them quarterly.

1944 - Congress passed the Individual Income Tax Act, which created the standard deductions on Form 1040.

1952 - President Truman proposed his Reorganization Plan No. 1, which replaced the patronage system at the IRS with a career civil service system. It also decentralized service to taxpayers and sought to restore public confidence in the agency.

1953 - President Eisenhower endorsed Truman's reorganization plan and changed the name of the agency from the Bureau of Internal Revenue to the Internal Revenue Service.

1954 - The filing deadline for individual tax returns changed from March 15 to April 15.

1961 - The Computer Age began at IRS with the dedication of the National Computer Center at Martinsburg, W.Va.

1965 - IRS instituted its first toll-free telephone site.

1972 - The Alcohol, Tobacco and Firearms Division separated from the IRS to become the independent Bureau of Alcohol, Tobacco and Firearms.

1974 - Congress passed the Employee Retirement and Income Security Act, which gave regulatory responsibilities for employee benefit plans to the IRS.

1986 - Limited electronic filing began. President Reagan signed the Tax Reform Act, the most significant piece of tax legislation in 30 years. It contained 300 provisions and took three years to implement. The Act codified the federal tax laws for the third time since the Revenue Act of 1918.

1992 - Taxpayers who owed money were allowed to file returns electronically.

1998 - Congress passed the IRS Restructuring and Reform Act, which expanded taxpayer rights and called for reorganizing the agency into four operating divisions aligned according to taxpayer needs.

2000 - IRS enacted reforms, ending its geographic-based structure and instituting four major operating divisions: Wage and Investment, Small Business/Self-Employed, Large and Mid-Size Business and Tax Exempt and Government Entities. It was the most sweeping change at the IRS since the 1953 reorganization.

2001 - IRS administered a mid-year tax refund program to provide advance payments of a tax rate reduction.

2003 - IRS administered another mid-year refund program, this time providing an advance payment of an increase in the Child Tax Credit. Electronic filing reached a new high - 52.9 million tax returns, more than 40 percent of all individual returns.

Page Last Reviewed or Updated: 12-Feb-2014

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