According to a Transamerica Center for Retirement Studies (TCRS) report, fewer than four in ten U.S. workers know about a tax credit that may help them save for retirement, per the IRS. The Saver’s Credit is available to eligible taxpayers who are saving for retirement.
The Saver’s Credit is a non-refundable tax credit and can be applied up to the first $2,000 of a participant’s contributions to a retirement plan The maximum credit is $1,000 for a single filer and $2,000 for married couples filing jointly. In addition to the tax-advantages of saving for retirement in a 401(k), 403(b) or IRA, the Saver’s Credit is an added benefit to reducing federal taxes.
This credit is available to workers ages 18 years or older who have contributed to a retirement plan in the past year and meet the Adjusted Gross Income (AGI) requirements: