Yes, pension income offsets the RSCC - or Saver's credit.
Depending on your adjusted gross income and tax filing status, you can claim the credit for 50%, 20% or 10% of the first $2,000 you contribute during the year to a retirement account. Therefore, the maximum credit amounts that can be claimed are $1,000, $400 or $200.
- The biggest credit amount a married couple filing jointly can claim together is $2,000.
- But, if you and/or your spouse took a taxable distribution from your retirement account during the two years prior to the due date for filing your return (including extensions), that distribution reduces the size of the Savers Credit available to you.
- The Savers Credit is a 'non-refundable' tax credit. That means this credit can reduce the tax you owe to zero, but it can't provide you with a tax refund.
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