Elective deferrals and IRA contributions by certain individuals

In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the applicable percentage of so much of the qualified retirement savings contributions of the eligible individual for the taxable year as do not exceed $2,000. For purposes of this section— In the case of a joint return, the applicable percentage is— In the case of— In the case of any taxable year beginning in a calendar year after 2006, each of the dollar amounts in paragraph (1) shall be increased by an amount equal to— For purposes of this section— The term “eligible individual” means any individual if such individual has attained the age of 18 as of the close of the taxable year. The term “eligible individual” shall not include— For purposes of this section— The term “qualified retirement savings contributions” means, with respect to any taxable year, the sum of— in the case of any taxable year beginning before January 1, 2027— the amount of— The qualified retirement savings contributions determined under paragraph (1) shall be reduced (but not below zero) by the aggregate distributions received by the individual during the testing period from any entity of a type to which contributions under paragraph (1) may be made. The preceding sentence shall not apply to the portion of any distribution which is not includible in gross income by reason of a trustee-to-trustee transfer or a rollover distribution. For purposes of subparagraph (A), the testing period, with respect to a taxable year, is the period which includes— There shall not be taken into account under subparagraph (A)— For purposes of determining distributions received by an individual under subparagraph (A) for any taxable year, any distribution received by the spouse of such individual shall be treated as received by such individual if such individual and spouse file a joint return for such taxable year and for the taxable year during which the spouse receives the distribution. For purposes of this section, adjusted gross income shall be determined without regard to sections 911, 931, and 933. Notwithstanding any other provision of law, a qualified retirement savings contribution shall not fail to be included in determining the investment in the contract for purposes of section 72 by reason of the credit under this section.