Saver's Tax Credit: Do You Qualify?

Are you a savvy retirement saver? You could get a nice little tax kickback. We'll drink to that! 🍻

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The saver's tax credit (officially known as the Retirement Savings Contributions Credit), provides a tax break for low and moderate income Americans who contribute to their retirement accounts. Save some, earn some. 💵

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Wondering if you're eligible for this extra cash from Uncle Sam? 🤔 Keep reading.

Here’s Five Fast Facts on the saver's tax credit:

1. 📑 The Claim Game - Under the saver’s tax credit, qualifying taxpayers can claim 10%, 20%, or 50% of their first $2,000 in retirement savings contributions to reduce their tax liability.

2. 📊 At My Limit - The amount of the credit you're entitled to will depend on your adjusted gross income (AGI). Click here to view an income limits chart. If you're single, the maximum credit amount you can receive is $1,000. If you're married filing jointly, the max is $2,000.
   
3. 💰 Check the List - On top of income requirements, you’ll need to contribute to at least one (if not more) retirement savings account: Traditional IRA, Roth IRA, 401(k), 403(b), Governmental 457(b), SARSEP plan, SIMPLE IRA, 501(c)(18)(D) plan, or ABLE account (if you’re the designated beneficiary).
   
4. 🙋🏼‍♂️ #Adulting - Finally, you'll need to be 18 years of age or older, not claimed as a dependent on someone else’s tax return, and not a full-time student. 

5. 🚫 Rollin' In the Deep - Rollover contributions don't qualify for the saver's tax credit. Neither do any contributions from your employer (for example, from a company match program). 

🔥Bottom line: How does the credit work? It's a "nonrefundable tax credit" meaning it reduces your tax liability, but you won't get a refund. Oh, and if you withdrew any funds from your retirement accounts within two years of claiming the saver's tax credit, it'll reduce the amount of the credit you're entitled to. Gotta love that IRS fine print! 

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Will you be taking advantage of this tax credit?

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