Is there some type of credit for Roth IRAs for low earners?
The Retirement Savings
Contributions Credit (Saver’s Credit) helps low and middle-income taxpayers
save for retirement. Sometimes this is called the Credit for Qualified
Retirement Savings Contribution or Retirement Credit. It’s a non-refundable tax
credit which means it can’t reduce the amount of tax owed to less than zero.
Beginning in 2018, the Saver’s
Credit can be taken for your contributions to an ABLE (Achieving a Better Life
Experience) account if you’re the designated beneficiary.
Based on your income and filing
status, you may claim a credit on your return for a percentage
of the contributions you made to a qualified retirement plan.
You qualify for the credit if
18 or older
Not a full-time student
Not claimed as a dependent on
someone else’s return
In 2018 your adjusted gross
income (AGI) also can’t be more than:
$63,000 if married filing jointly
$47,250 if head of household
(with qualifying person)
$31,500 if single, married filing
separately, or qualifying widow(er) with dependent child
The maximum credit is $2,000
($4,000 for married taxpayers who are filing jointly), but is often less due to
other deductions and credits and is limited by income. For more details on how
to calculate your credit, see the IRS Saver's Credit page.
We’ll calculate this credit for
you if you qualify and generate Form 8880.