Updated October 18, 2026. Quick answer: Line 1 is your IRA and ABLE account contributions, and line 2 is your workplace plan contributions, which may show in box 12 of your Form W-2. Line 3 adds them. Line 4 is certain distributions you received, and line 5 subtracts line 4 from line 3.
IRS worksheets read line by line: Form 8880 Credit Limit Worksheet.
What lines 1 to 5 ask for
The captions read “Traditional and Roth IRA contributions, and ABLE account contributions by the designated beneficiary for 2025.” for line 1, “Do not include rollover contributions” as the next sentence of line 1, and “Add lines 1 and 2” for line 3. Line 5 says “Subtract line 4 from line 3.” Each line has a column for you and one for your spouse, as the Form 8880 walk-through explains.
Line 2: workplace plan contributions
The instructions say “Include on line 2 any of the following amounts.” The list includes “Voluntary employee contributions to a qualified retirement plan” and “Contributions to a 501(c)(18)(D) plan.” On where to find the amounts, they say “These amounts may be shown in box 12 of your Form(s) W-2 for 2025.”
One kind does not count: “they aren’t voluntary contributions made by the employee. They don’t qualify for the credit and shouldn’t be included on line 2.” The instructions apply that to “Contributions designated under section 414(h)(2)”.
Line 4: distributions you received
The instructions say “Enter the total amount of distributions you, and your spouse if filing jointly, received after 2022 and before the due date of your 2025 return (including extensions)” from the plan types they list, which include “Traditional or Roth IRAs, or ABLE accounts.”
They also list distributions to leave out. One is “Distributions not taxable as the result of a rollover”. Another is “Distributions from an inherited IRA by a nonspousal beneficiary.” Use the full list in the instructions printed on page 2 of the form.
On a joint return, “If you’re filing a joint return, include both spouses’ amounts in both columns.” The instructions give one exception: “Don’t include your spouse’s distributions with yours when entering an amount on line 4 if you and your spouse didn’t file a joint return for the year the distribution was received.”
A computed illustration of line 3
Line 3 adds lines 1 and 2. As a computed illustration, not an IRS example, if line 1 were $1,200 and line 2 were $800 then line 3 would be $2,000 (computed: $1,200 + $800 = $2,000). Your own figures come from your account statements and your Form W-2.
Where the number comes from
Line 1 comes from your IRA or ABLE account records, line 2 from your Form W-2 and plan statements, and line 4 from the distributions you or your spouse received. The IRA side of the story is covered at Schedule 1 line 20, and the credit these lines feed is described on the saver’s credit page.
Where it goes next
Line 5 carries into line 6, which says “In each column, enter the smaller of line 5 or $2,000”. That step and the rest of the form are on the lines 6 to 12 page.
Edition and line numbers
This page reads the 2025 Form 8880, Credit for Qualified Retirement Savings Contributions, which carries its own instructions on its second page. They are the current files irs.gov served on 2026-10-18, the files for the tax year 2025 return, filed in 2026. The form’s own header says “Attach to Form 1040, 1040-SR, or 1040-NR.” Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Including rollovers on line 1. The caption says “Do not include rollover contributions”.
- Counting a pension-style plan payment from your employer. The instructions say contributions designated under section 414(h)(2) “They don’t qualify for the credit and shouldn’t be included on line 2.”
- Leaving a joint-return spouse’s distributions out of both columns. The instructions say “include both spouses’ amounts in both columns.”
Related: saver’s credit, Schedule 1 line 20, Form 8606, and Form 8880.
Sources
- Form 8880, Credit for Qualified Retirement Savings Contributions, with its instructions (2025): https://www.irs.gov/pub/irs-pdf/f8880.pdf
- IRS page for Form 8880 and its latest developments (not a source of any figure on this page): irs.gov
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.