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Old 06-15-2021, 08:32 AM   #21
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Originally Posted by pirsquared View Post
Maybe self-employment tax if relevant?
Unfortunately not. SE taxes come after that point on the tax return, so they can't be offset by the RSCC.

Refundable credits (or refundable portions of credits) come after SE taxes, so in a sense they offset SE taxes mathematically on the return. But in a sense they don't, because you're paying SE taxes even if you don't get those credits, and you're getting those credits even if you don't pay SE taxes.

(Refundable credits are things like the earned income credit, the additional child tax credit, refundable portion of the American Opportunity Tax Credit, APTC overpayment/refund, and a couple of others.)
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Old 06-15-2021, 08:36 AM   #22
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Originally Posted by pb4uski View Post
No, because DS is working so he isn't collecting defined benefit pension benefits.

I am collecting defined benefit pension benefits but I do not consider them to be retirement savings account withdrawals.... I don't view them as retirement account withdrawals but it appears that the IRS does for the purpose of the retirment savers credit... see https://taxtopics.net/Sec4974c.htm#:...0beneficiaries.



So:
I saw that same link about the definition of a SEc 4974 plan, which is why I initially thought we weren't eligible. But then I saw this: "In general, your qualified retirement savings contribution is not reduced by distributions you received from a plan in which you could not make a qualified retirement savings contribution."(https://apps.irs.gov/app/IPAR/resour...excldplan.html) So that is why I am unsure.
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Old 06-15-2021, 08:37 AM   #23
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I saw that same link about the definition of a Sec 4974 plan and thought we were not eligible, but then I found this: ""In general, your qualified retirement savings contribution is not reduced by distributions you received from a plan in which you could not make a qualified retirement savings contribution." (https://apps.irs.gov/app/IPAR/resour...excldplan.html) So that is why I am unsure.
I'm still not sure on this main question. However, I think the intent of that portion of Form 8880 is to prevent people from just making the contributions (typically to IRAs or 401(k)s), getting the credit, then taking the money back out.

Since that's clearly not what you're doing, I think the intent is that you should qualify for the credit. Whether that's technically the right answer is harder to figure out.
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Old 06-15-2021, 08:40 AM   #24
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Originally Posted by pb4uski View Post
No, because DS is working so he isn't collecting defined benefit pension benefits.

I am collecting defined benefit pension benefits but I do not consider them to be retirement savings account withdrawals.... I don't view them as retirement account withdrawals but it appears that the IRS does for the purpose of the retirment savers credit... see https://taxtopics.net/Sec4974c.htm#:...0beneficiaries.



So:
Quote:
Originally Posted by SecondCor521 View Post
I'm still not sure on this main question. However, I think the intent of that portion of Form 8880 is to prevent people from just making the contributions (typically to IRAs or 401(k)s), getting the credit, then taking the money back out.

Since that's clearly not what you're doing, I think the intent is that you should qualify for the credit. Whether that's technically the right answer is harder to figure out.
Right. I would hate to go through the process of maximizing the credit through making strategic tIRA contributions (when we might otherwise just do Roth) and then find out later we didn't qualify for the credit. Especially since this would affect our PTC and we would then have to fix that later as well.
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Old 06-15-2021, 07:13 PM   #25
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I had one more thought re the distinction between a pension to which one contributes and a pension to which one does not/cannot contribute. In my state, one can collect unemployment benefits while receiving a pension (if they otherwise qualify for the UI, of course). The UI will be reduced, but the amount of the reduction depends on whether or not one contributed to the pension. If a person contributed to the pension, then the UI is reduced .50 for each $1 of the pension, but if the person did not contribute to the pension, then the UI is reduced dollar for dollar.
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