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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?

  • Age 18 or older
  • Not a full-time student and
  • Not claimed as a dependent or another person's return

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*

IRS Table
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.

Here are some online resources to help you get started:

J28301
 
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.   

AIG Retirement Services (“ARS”), represents AIG member companies -The Variable Annuity Life Insurance Company (“VALIC”) and its subsidiaries VALIC Financial Advisors, Inc. (“VFA”) and VALIC Retirement Services Company (“VRSCO”). All are members of American International Group, Inc. (“AIG”).

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