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Are You Eligible for a Tax Credit?

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March 15, 2011, Volume 57, No. 25

Tax season is in full swing, and many of you may be looking for ways to get more money back this year. Well with the Saver’s Credit, you can.

If you’re currently saving for retirement and fall within certain income limits, the Saver’s Credit could reduce your tax bill by as much as $1,000. The actual percentage is based on your tax filing status and gross income.

For instance, let’s say you’re single and your adjusted gross income is less than $16,750. If you contributed $2,000 to your retirement plan last year, you’re eligible for a 50% tax credit. That means you can reduce your tax bill (or increase your refund) by $1,000!

Wondering if you qualify? Take a look at the chart below to see if you can take advantage of this valuable tax credit. Keep in mind that if you’re claimed as a dependent on someone else’s tax return, you’re not eligible for the Saver’s Credit.

2010 Saver’s Credit

Modified Adjusted Gross Income

Credit %

Maximum Tax Credit*

Married Filing
Jointly

Head of
Household

Single

$0–$33,500

$0–$25,125

$0–$16,750

50% of first $2,000 deferred

$1,000

$33,501–$36,000

$25,126–$27,000

$16,751–$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

*According to Internal Revenue Service (IRS) regulations, the maximum annual contribution eligible for the Saver’s Credit is $2,000

Related: Benefits Open Enrollment; The Total Reward of Working at Penn

Almanac - March 15, 2011, Volume 57, No. 25