Saver’s Credit for Retirement Contributions
The Saver’s Credit (which used to be called the Retirement Savings Contributions Credit), is a tax credit up to $1,000 ($2,000 if filing jointly). The credit is for contributions to 401ks, IRAs, and other retirement plans.
Who can claim the Saver’s Credit:
- Individuals (and married filing separately) with incomes up to $26,500 in 2008 ($27,750 in 2009).
- Married couples filing jointly with incomes up to $53,000 in 2008 ($55,500 in 2009).
- Head of households with income up to $39,750 in 2008 ($41,625 in 2009).
Eligibility guidelines:
- You must be at least 18 years old.
- You cannot be a full-time student.
- You cannot be claimed as a dependent on another person’s return.
The credit is in addition to other tax benefits you receive from contributions, like tax deferrals on 401, and deductions on IRA contributions.
The credit, which is a percentage of the contribution ranging from 10% to 50% decreases as your income increases. It can be figured using Form 8880.
