The Saver’s Credit
You Could Get Paid to Save for Retirement
What Is It and How Do You Get It?
If you’re saving for retirement at work or in an individual retirement account (IRA), you may already benefit from some great tax savings. But if you qualify for the Retirement Savings Contribution Credit (commonly known as the Saver’s Credit), you might be able to reduce your tax bill even more – by up to $1,000 ($2,000 for a married couple filling jointly).
The Saver’s Credit is a special tax credit offered by the IRS to give low and moderate income earners an extra incentive to save for retirement. The nice thing about he Saver’s Credit is that it’s actually a tax credit, not a deduction, which means it may potentially reduce the amount of federal taxes you owe, or increase your return on taxes you may have already paid during the year.
Are You Eligible for the Saver’s Credit?
TO CLAIM THE SAVER’S CREDIT IN 2021, YOU MUST:
BE AGE 18 OR OLDER
NOT BE A FULL-TIME A STUDENT
NOT BE CLAIMED AS A DEPENDENT ON SOMEONE ELSE’S TAX RETURN
HAVE A MAXIMUM ADJUSTED GROSS INCOME OF:
$33K single/filing jointly
$49.5K head of household
$66k couples filing jointly
How much is the Saver’s Credit?
Depending on your income and filing status, you could receive a credit for between 10% and 50% of your contributions for the year.
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This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.