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rb56
New Member

If I have a traditional IRA and have taken withdrawals for 2017, can I take any tax credit if I decide to make contributions into my IRA before the deadline? I am 62.

I am also married, and I have an employer 401K with contributions less than $2000 for 2017.  But, I have substantial withdrawals from my IRA for 2017.

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dmertz
Level 15

If I have a traditional IRA and have taken withdrawals for 2017, can I take any tax credit if I decide to make contributions into my IRA before the deadline? I am 62.

If the amount that you withdrew from the traditional IRA in 2017 is more than the contributions that you made to the 401(k) and the traditional IRA for 2017, you are not eligible for any Retirement Savings Contributions Credit for 2017.  This credit is calculated on the first $2,000 of new retirement contribution for 2017 that exceed the amount that you withdrew.  (This is to prevent people from taking a retirement distribution just to fund a new contribution and claim the tax credit, without actually increasing their retirement savings.) 

You still might be eligible for a deduction for a traditional IRA contribution for 2017, depending on your filing status and modified AGI.

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2 Replies
dmertz
Level 15

If I have a traditional IRA and have taken withdrawals for 2017, can I take any tax credit if I decide to make contributions into my IRA before the deadline? I am 62.

If the amount that you withdrew from the traditional IRA in 2017 is more than the contributions that you made to the 401(k) and the traditional IRA for 2017, you are not eligible for any Retirement Savings Contributions Credit for 2017.  This credit is calculated on the first $2,000 of new retirement contribution for 2017 that exceed the amount that you withdrew.  (This is to prevent people from taking a retirement distribution just to fund a new contribution and claim the tax credit, without actually increasing their retirement savings.) 

You still might be eligible for a deduction for a traditional IRA contribution for 2017, depending on your filing status and modified AGI.

MichaelL1
Level 15

If I have a traditional IRA and have taken withdrawals for 2017, can I take any tax credit if I decide to make contributions into my IRA before the deadline? I am 62.

If you have earned income for 2017 tax year, you should go to the Deductions and Credits area of TurboTax, then to Retirements and Investments and enter an Traditional IRA.

This will show you the tax impact.  It is a deduction (not a credit) that you would get if you are eligible to claim one.

The IRA can be funded by the due of the 2017 return (April 17, 2018) and must be designated as a 2017 contribution.

A Roth is not deductible. 

Your age is fine to do this. 

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