How to Take Credit for Your Retirement
Saving for your retirement can make you eligible for a
tax credit worth up to $2,000. If you contribute to an
employer-sponsored retirement plan, such as a 401(k) or
to an IRA, you may be eligible for the Saver’s Credit.
Here are seven points the IRS would like you to know
about the Saver’s Credit:
1. The Saver’s Credit is formally known as the
Retirement Savings Contribution Credit. The credit can
be worth up to $2,000 for married couples filing a joint
return or $1,000 for single taxpayers.
2. Your filing status and the amount of your income
affect whether you are eligible for the credit. You may
be eligible for the credit on your 2012 tax return if
your filing status and income are:
Single, married filing separately or qualifying
widow or widower, with income up to $28,750
Head of Household with income up to $43,125
Married Filing Jointly, with income up to $57,500
3. You must be at least 18 years of age to be eligible.
You also cannot have been a full-time student in 2012
nor claimed as a dependent on someone else’s tax return.
4. You must contribute to a qualified retirement plan by
the due date of your tax return in order to claim the
credit. The due date for most people is April 15.
5. The Saver’s Credit reduces the tax you owe.
6. Use IRS Form 8880, Credit for Qualified Retirement
Savings Contributions, to claim the credit. Be sure to
attach the form to your federal tax return. If you use
IRS e-file the software will do this for you.
7. Depending on your income, you may be eligible for
other tax benefits if you contribute to a retirement
plan. For example, you may be able to deduct all or part
of your contributions to a traditional IRA.
For more information on the Saver’s Credit, see IRS
Publication 590, Individual Retirement Arrangements.
Also see Publication 4703, Retirement Savings
Contributions Credit, and Form 8880. They are available
at IRS.gov or
by calling 800-TAX-FORM (800-829-3676).