Volunteer Income Tax Assistance (VITA) Certification Practice Test

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What is Evan's retirement savings contributions credit?

$1,000
$250
$490
$0

The correct answer is: $0

Evan's retirement savings contributions credit would be $0 because eligibility for the Retirement Savings Contributions Credit, also known as the Saver's Credit, depends on several factors, including the taxpayer's adjusted gross income (AGI) and whether they made eligible contributions to a retirement account. If Evan's AGI exceeds the allowed thresholds for the credit or if he did not make any contributions to an eligible retirement savings plan during the tax year, he would not qualify for any credit. In these cases, even if contributions were made, the income level can disqualify a taxpayer from receiving the credit entirely, resulting in a $0 benefit from the program. Understanding the requirements for claiming the Retirement Savings Contributions Credit is crucial for accurate tax filing and maximizing potential credits for eligible taxpayers.