Kerry is single and has AGI of $25,000 in 2016.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 10% of the amount contributed to a Roth IRA, up to a maximum credit of $1,000. Kerry contributed $5,000 to his Roth IRA, so he is entitled to a credit of $500. However, the credit is phased out for taxpayers with AGIs above certain levels. For single taxpayers, the credit is phased out for AGIs between $31,800 and $34,800. Kerry's AGI is $25,000, so he is entitled to the full $500 credit.

Kerry Is Single and Has AGI of $25,000 in 2016