Retirement Savings Contributions Tax Credit for low income individuals.

Retirement Savings Contributions Credit, or informally 'Savers Tax Credit' is a tax credit for those taxpayers in the low to medium income category who contribute to the employer sponsored retirement plan. The following are the eligibility criterion for the Retirement Savings contribution credit.

  1. Income Limits for retirement savings contribution credit: If you are a individual taxpayer, your income must be upto $26,500. For head of household, the income cap is slightly larger, $39,750.
  2. Age Limit for this tax credit: You must be above 18 years of age.
How much tax credit will you get for making contributions to retirement savings?
The following is the quote from IRS.
If you make eligible contributions to a qualified IRA, 401(k) and certain other retirement plans, you may be able to take a tax credit of up to $1,000 or up to $2,000 if filing jointly. The credit is a percentage of the qualifying contribution amount, with the highest rate for taxpayers with the least income.

Read more about retirement savings  tax credit on the IRS webpage for this tax credit.

Mar 14, 2009

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