Most know that making eligible contributions to your IRA or employer-sponsored retirement plan may be tax deductible, but did you know that you may also be eligible for a tax credit?
Read below for details on who is eligible, the tax credit amount and a breakdown of contribution percentages against your respective Adjusted Gross Income (AGI).
You’re eligible to take a tax credit if you meet the following criteria:
You qualify as a student if during any part of the 5 calendar months of the tax year you:
*A school includes technical, trade, and mechanical schools. It does not include on-the-job training courses, correspondence schools, or schools offering courses only through the Internet.*
Your AGI reported on your 1040 Form series return determines if the credit amount is 50%, 20% or 10% of:
The saver’s credit is a nonrefundable federal income tax credit available to individuals with an adjusted gross income (AGI) of less than $73,000. Salary-deferral contributions to a 401(k), 403(b), governmental 457(b), SIMPLE IRA, and SAR SEP can reduce an individual’s AGI, creating Saver’s Tax Credit eligibility.
The credit is available for contributions to a traditional or Roth IRA, rollover contributions do not qualify for the tax credit. The maximum annual contribution eligible for the credit is $2,000 ($4,000 if married filing jointly), and the maximum credit is 50%, making the maximum saver’s credit $1,000 ($2,000 if married filing jointly).
Use the chart below or click here to calculate your credit.
For more information visit the IRS website or contact your plan administrator.
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