It is a tax credit given when you make eligible contributions to certain
eligible retirement plans or to an individual retirement arrangement(IRA).
The amount of
the saver's credit you can get is generally based on the contributions you make
and your credit rate. For more information, refer to Publication
590-A.pdf, Contributions to
Individual Retirement Arrangements (IRAs), the instructions for Form
8880.pdf, Credit for Qualified
Retirement Savings Contributions, and Do I Qualify for the Retirement Savings Contributions
Credit? If you're
eligible for the credit, your credit rate can be as low as 10% or as high as
50%, depending on your adjusted gross income. The lower your income (or joint
income, if applicable), the higher the credit rate; your credit rate also
depends on your filing status. These two factors will determine the maximum
credit you can take. You're not eligible for the credit if your adjusted gross
income exceeds a certain amount. Dependents and full-time students are also not
eligible for the credit.
