Products January 30, 2019

Participants Need to Be Reminded About the Saver’s Credit

The Transamerica Center for Retirement Studies found six in 10 employees do not know about the tax credit.

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The Saver’s Credit, also referred to as the Retirement Savings Contributions Credit by the Internal Revenue Service (IRS), is available to eligible taxpayers who are saving for retirement. However, 62% of workers are unaware of the credit, according to survey findings from the Transamerica Center for Retirement Studies (TCRS).

The Saver’s Credit is a non-refundable tax credit that may be applied up to the first $2,000 of voluntary contributions an eligible worker makes to a 401(k), 403(b) or similar employer-sponsored retirement plan, or a traditional or Roth individual retirement account (IRA). The maximum credit is $1,000 for single filers or individuals and $2,000 for married couples filing jointly.

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The credit is available to workers ages 18 years or older who have contributed to a company-sponsored retirement plan or IRA in the past year and meet the following adjusted gross income (AGI) requirements:

  • Single tax filers with an AGI of up to $31,500 in 2018 or $32,000 in 2019 are eligible;
  • For the head of a household, the AGI limit is $47,250 in 2018 or $48,000 in 2019; and,
  • For those who are married and file a joint return, the AGI limit is $63,000 in 2018 or $64,000 in 2019.

Additionally, the filer cannot be a full-time student and cannot be claimed as a dependent on another person’s tax return.

TCRS has created fact sheets, infographics and newsletter articles—in English and Spanish—that are available and encouraged for public use at www.transamericacenter.org/saverscredit.

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