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Your contributions to a traditional IRA or a Roth IRA are also eligible for the Savers Credit.

You can’t claim your employer's contributions to these accounts, however. The Savers Credit can be claimed for your contributions to a: Which retirement accounts qualify for the credit? That means this credit can reduce the tax you owe to zero, but it can't provide you with a tax refund.

The Savers Credit is a 'non-refundable' tax credit.

But, if you and/or your spouse took a taxable distribution from your retirement account during the two years prior to the due date for filing your return (including extensions), that distribution reduces the size of the Savers Credit available to you.

The biggest credit amount a married couple filing jointly can claim together is $2,000.Therefore, the maximum credit amounts that can be claimed are $1,000, $400 or $200. How much could the Savers Credit cut from my tax bill?ĭepending on your adjusted gross income and tax filing status, you can claim the credit for 50%, 20% or 10% of the first $2,000 you contribute during the year to a retirement account. Indeed, a recent survey* shows that only 12% of American workers with annual household incomes of less than $50,000 are aware of the Savers Credit.

Unfortunately, many eligible taxpayers don't take advantage of this break because they don't know about it. If you qualify, a Savers Credit can reduce or even eliminate your tax bill. This credit is in addition to the other tax benefits for saving in a retirement account. The Savers Credit gives a special tax break to low- and moderate-income taxpayers who are saving for retirement.įormerly 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.