The Saver’s Tax Credit is a credit offered by the IRS to incentivize low and moderate-income taxpayers to save money for retirement. What’s great about this tax credit is that it is offered in addition to other tax benefits associated with saving money in a retirement account.
How to Qualify
In order to qualify for the Saver’s Tax Credit, you must be at least 18 years old, you cannot be a full-time student, and you must not be eligible to be claimed as a dependent on someone else’s taxes. In addition there are strict income requirements that you must adhere to. For 2018, the maximum adjusted gross income for eligibility is:
- $63,000 for a married couple filing jointly
- $47,250 for a head of household
- $31,500 for all other taxpayers
How Much Is the Saver’s Credit?
The amount that you can save via the Saver’s Tax Credit all depends on how much your income is and how much your retirement contributions are. In general, the lower your income and the more you contribute to retirement, the higher your credit will be. The most money that you can claim as credit is $1,000 on a $2,000 retirement contribution, and this amount can be doubled if you are married filing jointly.
To learn more about the Saver’s Tax Credit, get in touch with the pros at Taxation Solutions, Inc. today!