Formerly called the Retirement Savings Contributions Credit, the Savers Credit gives a special tax break to low- and moderate-income taxpayers who are saving for retirement.
Severs credit is non-refundable, meaning it can only reduce the taxpayer's tax bill to zero and not result in a refund. The saver's tax credit can be used to reduce income tax obligations.
To be eligible for the Saver's Credit, You make voluntary contributions to a qualified retirement plan, You're at least age 18, You weren't a full-time student during any part of five calendar months.
If you are unmarried, married filing separately, or a qualified widow(er), your filing status is $34,000. If head of household, your filing status is $51,000. If you are married filing jointly, your filing status is $68,000.
401(k) Plan, Traditional or Roth IRA, 403(b) Plan, 457(b) Plan, SARSEP or SIMPLE Plan, Thrift Savings Plan, 501(c)(18)(D) Plan, ABLE account are qualify for the savers credit.
The saver's credit is worth up to $1,000 ($2,000 if married filing jointly). Keep in mind that a credit is not the same as a tax deduction.
Depending on your filing status and AGI, you can be qualified for 50%, 20%, or 10% of the maximum contribution amount. Your tax credit is calculated as a portion of your retirement contributions.