14 December 2009
The Retirement Savings Contribution Credit, known as the Saver's Credit, allows you to get an income tax credit for up to half of what you contribute to your IRA or other qualified retirement plan. The maximum saver's credit is $1,000 ($2,000 for married couples), the IRS cautioned that it is often much less and, due in part to the impact of other deductions and credits, may, in fact, be zero for some taxpayers.

If you are Married Filing Jointly and you and your spouse make eligible contributions, both of you may claim the credit. Note: If you received a distribution from an IRA or other plan with contributions eligible for the credit, the distribution reduces the amount of your 2009 contributions that are eligible for the credit. For 2009, this applies to distributions you received during 2007, 2008 and 2009, and to distributions you will receive in 2010 before the due date of your 2009 return (including extensions).

Saver's Credit Requirements

You qualify for the Saver's Credit in 2009 if you are:
  • 18 or older
  • Not a full-time student
  • Not claimed as a dependent on someone else's return, and
  • Have an AGI that does not exceed $55,500 if Married Filing Jointly, $41,625 if Head of Household and $27,750 if Single, Married Filing Separately or Qualifying Widow(er).

Your Maximum Saver's Credit Amount

The Saver's Credit is equal to a percentage of your eligible contributions. AGI and filing status determine the percentage — 10%, 20% or 50%. When calculating the Saver's Credit, AGI includes excluded foreign income. Here's how the income limitations break down according to filing status (based on 2009 tax year).

Married Filing Jointly
$0–$33,000, 50%
$33,001–$36,000, 20%
$36,001–$55,000, 10%

Head of Household
$0–$24,750, 50%
$24,751–$27,000, 20%
$27,001–$41,625, 10%

Single, Married Filing Separately or Qualifying Widow(er)
$0–$16,500, 50%
$16,501–$18,000, 20%
$18,001–$27,750, 10%

You have until April 15, 2010, to start or contribute to an IRA to claim the Saver's Credit on your 2009 tax return.
Share:
Topic: Credits and Deductions