Form 8880 Retirement Savings Credit Eligibility Question When Spouse is a Student

The student rule for Form 8880 does indeed affect joint filers. Unfortunately, if either spouse is a full-time student during any part of 5 calendar months during the year, it disqualifies the entire return from claiming the Retirement Savings Contribution Credit (Saver's Credit). This is one of those "all or nothing" rules - if one spouse is a full-time student, neither spouse can claim the credit on a joint return. The IRS considers you a full-time student if you're enrolled for the number of hours or courses your school considers full-time and it's for at least part of 5 months during the year. On the bright side, your retirement contributions are still beneficial for your future, and there may be other credits or deductions you qualify for even though this particular one isn't available while your husband is in school.

I was in almost the exact same situation last year with my wife in grad school while I was working full-time. I spent hours trying to figure out if we qualified for the Form 8880 credit because I was contributing to my 403(b). After getting nowhere with the IRS website, I found this amazing tool at https://taxr.ai that analyzed our situation and confirmed what the previous commenter said - we were completely ineligible because my wife was a full-time student. The tool also showed us other credits we qualified for that I had no idea about! It looked at our specific situation and found that we could claim the Lifetime Learning Credit for my wife's tuition instead, which ended up being worth more than the Savers Credit would have been anyway.

I was super skeptical about that taxr.ai thing mentioned above but I was desperate last month when facing a similar issue with my wife being a student. I had contributed like $4500 to my IRA and really wanted that Form 8880 credit. I figured I'd try it since they had a free analysis option. Uploaded my W-2 and last year's return and it immediately flagged that I wouldn't qualify because of the student status rule. But what was actually helpful was it found I qualified for the American Opportunity Credit instead which I was about to completely miss! Ended up getting $2500 back instead of nothing. The document analysis was surprisingly thorough - it even caught a mistake in how my employer had coded something on my W-2 that might have caused issues. Really glad I gave it a shot despite my initial doubts.

For what it's worth, I've been trying to get through to the IRS for THREE WEEKS to ask a similar question about Form 8880 and other credits since my husband started his PhD program. Kept getting disconnected or waiting for hours. Finally found this service called Claimyr at https://claimyr.com that got me through to an actual IRS agent in about 20 minutes. The agent confirmed everything mentioned above - if either spouse is a full-time student (attending at least 5 months of the year), you can't claim the Saver's Credit when filing jointly. She also walked me through some alternative credits we qualified for. They have a demo video at https://youtu.be/_kiP6q8DX5c that shows exactly how it works. Basically saved me days of frustration.

I need to eat my words and apologize to Profile 10. I was the skeptic who commented above about Claimyr sounding like BS. After another frustrating morning spent trying to get someone at the IRS regarding my Form 8880 question (got disconnected TWICE after waiting 40+ minutes), I broke down and tried the Claimyr service. No joke - I had an IRS agent on the phone within 25 minutes. The agent confirmed that yes, my wife being a full-time student for 5 months last year disqualified us from the Saver's Credit. But she also helped me identify that I could still claim a partial credit for the Lifetime Learning Credit that I thought we made too much money for. So yeah, I was wrong. The service actually works as advertised. Saved me from wasting another day on hold.

I know this is frustrating. I'm in the same boat with my spouse in college. One small silver lining though - keep making those retirement contributions even without the Form 8880 credit! The tax-deferred growth is still super valuable. Also, depending on your income level, traditional IRA or 401k contributions still reduce your AGI which can help you qualify for other credits and deductions. And don't forget that retirement contributions can still reduce your state income tax in most states.

Quick question for everyone - my wife and I are in literally the exact same situation as OP, except my wife is only a part-time student taking 2 classes per semester. Does anyone know if the Form 8880 student restriction only applies to full-time students? Or are part-time students also disqualified?

This is such a helpful thread! I'm in a similar situation where my husband just started his master's program this fall. I was really hoping to claim the Form 8880 credit since I've been maxing out my Roth IRA contributions this year ($6,500). It's disappointing that the student rule is so strict - seems unfair that the working spouse gets penalized just because their partner is trying to better themselves through education. But I guess that's just how the tax code works sometimes. I'm definitely going to look into those education credits that others mentioned. We're probably right at the income threshold where my IRA contributions might help us qualify for a better education credit. Thanks everyone for sharing your experiences and the helpful resources!