In Retirement News for Employers (Winter 2012), the Internal Revenue Service (the “IRS”) says that you may qualify for the Saver’s Credit of up to $1,000 ($2,000 if filing jointly) on your 2011 tax return for your 2011 IRA contributions. You have until April 17, 2012, to contribute to an IRA for 2011. The Saver’s Credit reduces the amount of income tax you may owe dollar-for-dollar, but not less than zero.
To qualify for the Saver’s Credit (more formally, the Retirement Savings Contributions Credit) for your eligible IRA contributions, your 2011 adjusted gross income can’t be more than:
• $56,500 if your filing status is married filing jointly;
• $42,375 if your filing status is head of household; or
• $28,250 if your filing status is single, married filing separately or qualifying widow(er).
Additionally, you cannot be:
• younger than age 18,
• a full-time student, or
• claimed as a dependent on another’s tax return.
The Saver’s Credit can also be taken for your contributions to 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) and governmental 457(b) plans, and for your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans.