Kerry is single and has AGI of $25,000 in 2014.During the year he contributes $5,000 to his Roth IRA.What is the amount of qualified retirement savings contributions credit to which he is entitled?
A)$200
B)$400
C)$800
D)$1,000

Question

Quizplus · Accepted Answer

The qualified retirement savings contributions credit is a tax credit that is available to low- and moderate-income taxpayers who make contributions to a qualified retirement plan, such as a Roth IRA. The credit is equal to 10% of the amount of the contribution, up to a maximum of $1,000. In this case, Kerry's contribution of $5,000 to his Roth IRA qualifies for the credit, so he is entitled to a credit of $500.

Kerry Is Single and Has AGI of $25,000 in 2014