What is income that qualifies for the Retirement Tax Credit?

Qualifying income is pensions, annuities, or taxable retirement Social Security benefits. The deduction is limited by adjusted gross income plus nontaxable interest income.

Pensions, annuities, and taxable retirement Social Security benefits that meet the following criteria are considered to be retirement income:

  • Paid from an annuity contract purchased under a plan which has been contributed to by your employer and you can't revoke as provided under Section 404(a)(2) of the Internal Revenue Code
  • Purchased by an employee under a plan which meets the requirements of Section 408 of the Internal Revenue Code (commonly known as IRA plans)
  • Paid by the United States, a state thereof, or the District of Columbia
  • Taxable retirement Social Security benefits (excluding disability and survivor benefits), only if included in your Federal adjusted gross income

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