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Are you eligible for the IRS Saver's Credit?
The Saver's Credit is a special tax break the IRS allows for low- and moderate-income taxpayers who are saving for retirement. It's in addition to other retirement saving benefits.
"The Saver's Credit is a "non-fundable" credit. In other words, it can reduce the tax you owe to as little as zero, but it won't give you a tax refund."
If you qualify, you might be able to claim a tax credit for 50%, 20% or 10% of the first $2,000 ($4,000 if married and filing jointly) you contribute during the tax year to a retirement saving account. The IRS calls The Saver's Credit a "non-fundable" credit. In other words, it can reduce the tax you owe to as little as zero, but it won't give you a tax refund.
So who's eligible?
The Saver's Credit is available for your contributions to a traditional or Roth IRA, 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18), or governmental 457(b) plan. Employer contributions cannot be claimed toward The Saver's Credit.
Here's the IRS Savers Credit for 2018*
| CREDIT RATE | MARRIED FILING JOINTLY | HEAD OF HOUSEHOLD | ALL OTHER FILERS** |
|---|---|---|---|
| 50% OF CONTRIBUTION | AGI NOT MORE THAN $38,000 | AGI NOT MORE THAN $28,500 | AGI NOT MORE THAN $19,000 |
| 20% OF CONTRIBUTION | $38,001 - $41,000 | $28,501 - $30,750 | $19,001 - $20,500 |
| 10% OF CONTRIBUTION | $41,001 - $63,000 | $30,751 - $47,250 | $20,501 - $31,500 |
| 0% OF CONTRIBUTION | MORE THAN $63,000 | MORE THAN $47,250 | MORE THAN $31,500 |
*IRS.gov, January 2018
**Single, married filing separately, or qualifying widow(er)
There are other restrictions, such as for rollover contributions and any recent distributions from your retirement accounts, so be sure to talk to your tax advisor.
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Securities and investment advisory services offered through VALIC Financial Advisors, Inc. (“VFA”), member FINRA, SIPC and an SEC-registered investment adviser.
Annuities issued by The Variable Annuity Life Insurance Company (“VALIC”), Houston, TX. Variable annuities distributed by its affiliate, AIG Capital Services, Inc. (“ACS), member FINRA.
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