The Saver’s Credit, also referred to as the Retirement Savings Contributions Credit by the Internal Revenue Service (IRS), is available to eligible taxpayers who are saving for retirement. However, 62% of workers are unaware of the credit, according to survey findings from the Transamerica Center for Retirement Studies (TCRS).
The Saver’s Credit is a non-refundable tax credit that may be applied up to the first $2,000 of voluntary contributions an eligible worker makes to a 401(k), 403(b) or similar employer-sponsored retirement plan, or a traditional or Roth individual retirement account (IRA). The maximum credit is $1,000 for single filers or individuals and $2,000 for married couples filing jointly.
The credit is available to workers ages 18 years or older who have contributed to a company-sponsored retirement plan or IRA in the past year and meet the following adjusted gross income (AGI) requirements:
- Single tax filers with an AGI of up to $31,500 in 2018 or $32,000 in 2019 are eligible;
- For the head of a household, the AGI limit is $47,250 in 2018 or $48,000 in 2019; and,
- For those who are married and file a joint return, the AGI limit is $63,000 in 2018 or $64,000 in 2019.
Additionally, the filer cannot be a full-time student and cannot be claimed as a dependent on another person’s tax return.
TCRS has created fact sheets, infographics and newsletter articles—in English and Spanish—that are available and encouraged for public use at www.transamericacenter.org/saverscredit.