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Health & Fitness

Get Paid to Save

Reduce your tax liability just for saving for retirement.

You may qualify for the Saver’s Tax Credit of up to $1,000 ($2,000 if filing jointly) for making eligible contributions to an employer-sponsored retirement plan, such as a 401K or an IRA. An added benefit is you have until April 15, 2013, to make IRA contributions for 2012. Unlike a deduction, a tax credit is a dollar-for-dollar reduction of your federal income tax liability and this credit can reduce the amount you owe or increase your refund for taxes already paid. 

Who is eligible for the credit?

To claim the Saver’s Credit for 2012, you must be:

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  1. Age 18 or older;
  2. Not a full-time student;
  3. Not claimed as a dependent on another person’s return; and
  4. With an adjusted gross income of not more than:
  •  
    • $57,500 if your filing status is married filing jointly;
    • $43,125 if your filing status is head of household; or
    • $28,750 if your filing status is single, married filing separately or qualifying widow(er).

Which contributions are eligible for the credit?

Eligible contributions include:

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  1. Contributions to a traditional or Roth IRA, and
  2. Salary reduction contributions (including voluntary after-tax and designated Roth contributions) to your employer-sponsored 401K, SIMPLE IRA, SARSEP, 403(b), 501(c)(18) and governmental 457(b) plans.

Rollover contributions are not eligible for the Saver’s Credit. Your eligible contributions for the credit may be reduced by any recent distributions you received from an employer-sponsored retirement plan or an IRA.

What is the amount of the credit?

The amount of the credit you can get is based on the contributions you make and your credit rate. Your credit rate can be as low as 10% or as high as 50%, depending on your income and your filing status.

Consult with your CPA to learn what options are available and best for you.

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