Saver’s Credit: How To Know If You Qualify

Saver’s Credit: How To Know If You Qualify

Do you currently put money into an IRA or 401k? If so, you may qualify for the Saver’s Credit!

This credit may not only reduce the tax you owe, but it also can help you save for retirement. Those who qualify for the credit must be at least 18 year old, not a full time student, and not claimed as a dependent on someone else’s return.

The Saver’s Credit it worth up to $4,000 for those who are married and file jointly and $2,000 for those who file single.

Of course, there are income limits to claiming the credit. If you are married filing jointly with an income up to $61,000, head of household with an income up to $45,750, or single/married filing separately with income up to $30,500, you fall within the threshold to receive the Saver’s Credit.

One last rule: you must have contributed to a retirement plan by the end of the year to qualify, but you can claim it on the due date of your taxes- which is April 15, just in case you forgot! All you need is Form 8880 Credit for Qualified Retirement Savings Contributions.

If you need more information about the Saver’s Credit, just give Paragon Accountants a call. We still have appointments available for filing your tax return!