At Work

Too Many Workers Unaware of Retirement Saving Tax Credit – 401K Specialist

Did you know many people can get a double tax benefit when they contribute to a retirement plan?

What Is the Saver’s Credit?

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 401k, 403b or similar employer-sponsored retirement plan, or a traditional or Roth IRA.

The maximum credit is $1,000 for single filers or individuals and $2,000 for married couples filing jointly. “The Saver’s Credit is a tax credit in addition to the benefit of tax-advantaged savings when contributing to a 401k, 403b or IRA,” Collinson explained. “Many eligible retirement savers may be confusing these two incentives because the notion of a double tax benefit seems too good to be jfair okomonom:ko’

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Categories: At Work, Retirement

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2 replies »

  1. This is an excellent incentive for young investors who are making $15 an hour or less. No one else is going to qualify and chances are anyone making $15 an hour are most likely going to put their money towards cost of living than investing because there just isn’t enough cash flow after bills are paid. I can see married couples filing joint and making a combined $30 an hour being able to take advantage of this credit for sure! Especially our young men and women serving in the military. I noticed this tax credit was buried deep into TurboTax tax credit section, but that could be because my wife and I do not qualify for the credit due to AGI. I do plan to make sure my son who married last year to a service member takes advantage of this. They are contributing to their TSP so I now have one more reason to encourage them to save even more than they already are! Thanks!

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