{"id":981,"date":"2016-12-10T13:29:36","date_gmt":"2016-12-10T18:29:36","guid":{"rendered":"http:\/\/www.etax.com\/blog\/?p=981"},"modified":"2016-12-07T13:32:35","modified_gmt":"2016-12-07T18:32:35","slug":"savers-tax-credit","status":"publish","type":"post","link":"https:\/\/www.etax.com\/blog\/2016\/12\/10\/savers-tax-credit\/","title":{"rendered":"The Saver\u2019s Tax Credit"},"content":{"rendered":"<p>Saving your money isn\u2019t easy, though when retirement rolls around, you\u2019ll be happy you have some cash stored away. If you work and make contributions to a retirement plan or Individual Retirement Account (<a href=\"https:\/\/www.etax.com\/blog\/2025\/08\/19\/big-changes-coming-for-inherited-iras-in-2025\/\">IRA<\/a>), you may be eligible for a specific tax benefit called The Saver\u2019s Tax Credit. Found on tax forms under the name \u201cCredit for Qualified Retirement Savings Contributions\u201d, the Saver\u2019s Tax Credit is non-refundable, though its specifically beneficial for taxpayers who don\u2019t have access to matched-savings plans such as Individual Development Accounts (IDAs), or for those who have made retirement savings a high priority with their income.<\/p>\n<p><strong><u>Qualifications<\/u><\/strong><\/p>\n<p>To be eligible to claim the Saver\u2019s Tax Credit, there are certain requirements that must be met:<\/p>\n<ul>\n<li>Must be 18 years of age or older<\/li>\n<li>Must not be enrolled as a full-time student<\/li>\n<li>Can\u2019t be claimed as anyone else\u2019s dependent on a tax return<\/li>\n<li>Adjusted gross income for 2016 must be below the following thresholds:<\/li>\n<li>$61,500 married filing jointly<\/li>\n<li>$46,125 filing head of household<\/li>\n<li>$30,750 single or married filing separately.<\/li>\n<\/ul>\n<p>Taxpayer\u2019s must earn income and owe taxes to claim the credit, which differs from the Earned Income Tax Credit (EITC). However, some workers who receive moderate income may be eligible for a larger EITC if they contribute pre-tax salary deductions to a retirement account and opt to claim the Saver\u2019s Tax Credit.<\/p>\n<p>These taxpayers are generally in the \u201cphase-down\u201d range of the EITC, where the credit decreases as taxable income increases. Because retirement contributions reduce the amount of taxable income, the moderate-income worker can receive a larger EITC.<!--more--><\/p>\n<p><strong><u>Eligible Contributions<\/u><\/strong><\/p>\n<p>Only certain contributions qualify for the Saver\u2019s Credit. Funds contributed to retirement from pre-tax salary reduction of the following plans are eligible:<\/p>\n<ul>\n<li>a 401(k) plan, including a SIMPLE 401(k)<\/li>\n<li>a section 403(b) annuity<\/li>\n<li>a governmental 457(b) plan<\/li>\n<li>a SIMPLE IRA plan<\/li>\n<li>a salary reduction SEP (Simplified Employee Pension)<\/li>\n<li>Individual Retirement Accounts<\/li>\n<\/ul>\n<p>If you make contributions to a Roth IRA or a traditional IRA, those also qualify for the tax credit. You can claim the credit even if you deduct IRA contributions. In addition, contributions made voluntarily after-tax to an eligible retirement plan or a 403(b) annuity can qualify for the credit.<\/p>\n<p><strong><u>Tax Benefits<\/u><\/strong><\/p>\n<p>The tax credit can be worth up to a maximum of 50% of a $2,000 contribution. Those who are married are entitled to a maximum contribution each, as they are not required to combine their retirement savings contributions. The Saver\u2019s Credit is based on the taxpayer\u2019s adjusted gross income. Refer to the guidelines below to determine what tax benefit matches your AGI for 2016:<\/p>\n<p>Married Filing Jointly \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Head of Household\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Other Filing Statuses \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Credit Amount<\/p>\n<p>$0 &#8211; $37,000 AGI \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$0- $27,750 AGI \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$0 &#8211; $18,500 AGI\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 50% of contribution<\/p>\n<p>$37,001 \u2013 $40,000 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $27,751 \u2013 $30,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $18,501 \u2013 $20,000 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 20% of contribution<\/p>\n<p>$40,001 \u2013 $61,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $30,001 \u2013 $46,125\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $20,001 \u2013 $30,750 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 10% of contribution<\/p>\n<p>More than $61,500\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 More than $46,125\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 More than $30,750 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 taxpayer not eligible<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Saving your money isn\u2019t easy, though when retirement rolls around, you\u2019ll be happy you have some cash stored away. If you work and make contributions to a retirement plan or Individual Retirement Account (IRA), you may be eligible for a specific tax benefit called The Saver\u2019s Tax Credit. Found on tax forms under the name [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[124],"tags":[516,38,392,446,134],"class_list":["post-981","post","type-post","status-publish","format-standard","hentry","category-credits-2","tag-ira-contributions","tag-retirement","tag-retirement-contributions","tag-retirement-savings","tag-savers-credit"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Saver\u2019s Tax Credit - eTax.com\u00ae Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.etax.com\/blog\/2016\/12\/10\/savers-tax-credit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Saver\u2019s Tax Credit - eTax.com\u00ae Blog\" \/>\n<meta property=\"og:description\" content=\"Saving your money isn\u2019t easy, though when retirement rolls around, you\u2019ll be happy you have some cash stored away. 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