Retirement Plans—Saver's Credit on Retirement Contributions

News from RWHSG

Retirement Plans—Saver’s Credit on Retirement Contributions

Posted by Kim Chen on January 31st, 2017

The IRS reminds low and moderate income workers that they should take steps now to save for retirement and earn a special tax credit in 2016 and future years. IRC Sec. 25B provides a nonrefundable tax credit (the saver’s credit) of up to $1,000 ($2,000 for married filing jointly) for contributions or elective deferrals by eligible taxpayers to a 401(k) plan, 403(b) annuity, 457 plan, SIMPLE, SEP, or a traditional or Roth IRA. The credit can be claimed by taxpayers who are married filing jointly with incomes up to $61,500 in 2016 ($62,000 in 2017), heads of household with incomes up to $46,125 in 2016 ($46,500 in 2017), and single or married individuals filing separately with incomes up to $30,750 in 2016 ($31,000 in 2017). Form 8880 (Credit for Qualified Retirement Savings Contributions) is used to claim the saver’s credit, and its instructions provide guidance on figuring the credit. News Release IR 2016-171.