The tax law recognizes that paying bills while saving for retirement can be one of the greatest challenges for Americans today, especially for those earning lower incomes. The Saver’s Credit offers some relief.
Qualified taxpayers who make contributions to a retirement plan, including traditional IRAs or Roth IRAs, by April 15, 2011 are eligible for this nonrefundable tax credit. The 10%, 20% or 50% credit is based on adjusted gross income and applies to the first $2,000 of contributions, bringing the top credit to $1,000.
To claim the credit, adjusted gross income must be less than $55,500 if married filing jointly, $41,625 if head of household or $27,750 if single, married filing separately or a qualifying widow(er).
