Yes, the taxable portion of IRA distributions is qualifying income. Non taxable distributions from a Roth IRA are not qualifying income.
There is no hard and fast rule (or formula) on how you allocate the amounts between the spouses.
• · If it's clear who paid it, e.g. it was deducted from one spouse's pay, allocate it all to him.
• · You can split it 50-50, if the payments come from a joint bank account
• · I proportion mine by percentage of income, e.g. if the wife earns 40% of the income, allocate 40% of the adjustments to her.
In the case of student loan interest it could all be allocated to the spouse who's name the loan is in. On the other hand, if the interest was paid with joint funds, a 50-50 allocation could also be correct.
