The Retirement Savings Contribution Credit
or the Saver’s Credit is a tax credit of up to $2,000 for married filing
jointly and worth up to $1,000 for individual taxpayers. This credit is
calculated as a percentage of the qualifying amount the taxpayer has
contributed to their retirement savings. This allows taxpayers with the least
income to enjoy the highest rate.
You can use this credit if you make
eligible contributions to an employer sponsored retirement plan or to an
individual retirement agreement (IRA). Eligibility for this tax credit also
depends upon your filing status and the amount of your yearly income.
If you haven’t yet filed your tax return
this year, you should check if you are eligible for this tax credit. The
eligibility criteria are:
filing separately or a single taxpayer with income up to $29,500
of household with income up to $44,250
filing jointly with income up to $59,000
are at least 18 years of age
are not claimed as a dependent on another person’s tax return
were not a full-time student at any time during 2013
You can only claim this credit if you have
contributed to a 401(k) or a similar workplace plan by the end of 2013. If you
haven’t, you can contribute to an IRA by the due date of your tax return (April
15), and it will be counted for the year 2013.
To claim the Saver’s credit, you need to
file Form 8880, Credit for Qualified Retirement Savings Contributions.
Labels: IRS, Tax Credit, Tax Filing, Tax News, Taxpayers