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Are You Eligible for a Tax Credit?
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March 2, 2010, Volume 56, No. 24

If you’re currently saving for retirement through Penn’s retirement plans or contributing to an Individual Retirement Account (IRA), you may be eligible for a tax credit for calendar year 2009. Up to $1,000 of your retirement savings could be returned as a tax credit if you meet certain income limits and eligibility requirements, including the following:

• You must be 18 years of age or older and not a full-time student in order to be eligible for the tax credit.

• You’re not eligible to receive the credit if you’re claimed as a dependent on someone else’s tax return.

• You must be within the following income limits in order to receive the credit:

Modified Adjusted Gross Income

Credit %

Maximum Tax Credit*

Married Filing Jointly

Head of Household

Single

$0 - $33,000

$0 - $24,750

$0 - $16,500

50% of first $2,000 deferred

$1,000

$33,001 - $36,000

$24,751 - $27,000

$16,501 - $18,000

20% of first $2,000 deferred

$400

$36,001 - $55,500

$27,001 - $41,625

$18,001 - $27,750

10% of first $2,000 deferred

$200

  • The maximum contribution taken into account for an individual is $2,000.

Source: Internal Revenue Service

Example:  Amy contributes $2,000 to her employer’s retirement plan for the 2009 calendar year. Because she’s single and her modified adjusted gross income is less than $16,500, she’s eligible for a $1,000 tax credit. The credit reduces the amount of taxes that she owes (or increases her tax refund) by $1,000 at tax-filing time.

For more information about the saver’s tax credit, visit the Internal Revenue Service’s website at www.irs.gov.

—Division of Human Resources

Related: HR: Upcoming Programs

Almanac - March 2, 2010, Volume 56, No. 24