Savers Tax Credit: How to get a retirement plan savings contribution credit for your IRA, 401k, or employer sponsored retirement plan

Putting aside money into your IRA, 401k, or employer sponsored retirement plan has many benefits, such as The Savers Tax Credit. By making eligible contributions to an employer retirement account you can receive tax benefits, up to 50%. The maximum credit amount is $2,000 or $4,000 if married filing jointly.

SAVERS TAX CREDIT REQUIREMENTS

You’re eligible for the credit if you’re:
1. Age 18 or older:
2. Not a full-time student
3. Not claimed as a dependent on another person’s return

The amount of credit you receive is determined by your adjusted gross income, and your filing status.

Example:

If you are single with an AGI of $20,751 – $32,000 and contributed $10,000 you will receive $1,000 , because your tax credit rate is 10%.

If you are single with an AGI not more than $19,250 and contributed $10,000 you will receive the maximum of $2,000 , because your tax credit rate is 50%.

If you are single with an AGI $19,251 – $20,750 and contributed $10,000 you will receive $2,000 , because your tax credit rate is 20%.

The Saver’s Credit can be taken for your contributions to a traditional or Roth IRA; your 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans.

Rollover contributions (money that you moved from another retirement plan or IRA) aren’t eligible for the Saver’s Credit. Also, your eligible contributions may be reduced by any recent distributions you received from a retirement plan or IRA.

(IRAs)…(read more)

LEARN MORE ABOUT: Qualified Retirement Plans

REVEALED: How To Invest During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing