Saver’s Credit Can Help You Save for Retirement

John F. Coggin, CPA MBAPrincipal, John F. Coggin CPA, PLLC

Low- and moderate-income workers can take steps to save for retirement and earn a special tax credit.

The saver’s credit, also called the retirement savings credit, helps offset part of the first $2,000 workers voluntarily contribute to traditional or Roth individual retirement arrangements (IRAs), SIMPLE IRAs, SEPs, 401(k) plans, 403(b) plans for employees of public schools and certain tax-exempt organizations, 457 plans for state or local government employees, and the Thrift Savings Plan for federal employees. The saver’s credit is available in addition to any other tax savings that apply as a result of contributing to retirement plans.

Credits for 2020 and 2021 are determined from the tables shown below and are based upon both filing status and income (AGI).

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