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Tax Credit Crush Tuesday: Retirement Savings Contributions Credit (Saver's Credit)

5:06 PM Jamaal Solomon 0 Comments Category :


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Retirement Savings Contributions Credit (Saver’s Credit)

You may be able to take a tax credit for making eligible contributions to your IRA or employer-sponsored retirement plan.

Who's eligible for the credit?

You're eligible for the credit if you're:
  1. Age 18 or older;
  2. Not a full-time student; and
  3. Not claimed as a dependent on another person’s return.
See the instructions for Form 8880Credit for Qualified Retirement Savings Contributions, for the definition of a full-time student.

Amount of the credit

The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA contributions up to $2,000 ($4,000 if married filing jointly), depending on your adjusted gross income (reported on your Form 1040 or 1040A). Use the chart below to calculate your credit.
*Single, married filing separately, or qualifying widow(er)
2017 Saver's Credit
Credit RateMarried Filing JointlyHead of HouseholdAll Other Filers*
50% of your contributionAGI not more than $37,000AGI not more than $27,750AGI not more than $18,500
20% of your contribution$37,001 - $40,000$27,751 - $30,000$18,501 - $20,000
10% of your contribution$40,001 - $62,000$30,001 - $46,500$20,001 - $31,000
0% of your contributionmore than $62,000more than $46,500more than $31,000

2016 Saver's Credit
Credit RateMarried Filing JointlyHead of HouseholdAll Other Filers*
50% of your contributionAGI not more than $37,000AGI not more than $27,750AGI not more than $18,500
20% of your contribution$37,001 - $40,000$27,751 - $30,000$18,501 - $20,000
10% of your contribution$40,001 - $61,500$30,001 - $46,125$20,001 - $30,750
0% of your contributionmore than $61,500more than $46,125more than $30,750

2015 Saver's Credit
Credit RateMarried Filing JointlyHead of HouseholdAll Other Filers*
50% of your contributionAGI not more than $36,500AGI not more than $27,375AGI not more than $18,250
20% of your contribution$36,501 - $39,500$27,376 - $29,625$18,251 - $19,750
10% of your contribution$39,501 - $61,000$29,626 - $45,750$19,751 - $30,500
0% of your contributionmore than $61,000more than $45,750more than $30,500

Retirement savings eligible for the credit

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.
Example: Jill, who works at a retail store, is married and earned $37,000 in 2016. Jill’s husband was unemployed in 2016 and didn’t have any earnings. Jill contributed $1,000 to her IRA in 2016. After deducting her IRA contribution, the adjusted gross income shown on her joint return is $36,000. Jill may claim a 50% credit, $500, for her $1,000 IRA contribution.

Additional resources


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Name: Jamaal Solomon





   

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