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Retirement Savings Contributions Credit (Saver's Tax Credit)

By: Old Point / 20 Jun 2023
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Looking for some good news to share with low- and moderate-wage workers? Inform them of the Saver's Credit. This federal income tax credit may be available to employees who:2023 Savers Tax Credit

  •          •are 18 years of age or older
  •          •are not a full-time student
  •          •are not claimed as a dependent on someone else's return
  •          •make contributions to a qualified IRA, 401(k) or other eligible retirement plan
  •          •meet certain financial criteria, as described below

Depending on adjusted gross income, a participant may receive a tax credit equal to 10, 20 or 50% of up to the first $2,000 of their 2023 contributions. Joint filers may both be eligible for a credit if each contributed to a plan and they meet the income limitation. The Saver's Credit is applied only as a reduction in the participant's income tax liability but is given in addition to any other tax benefits that may result from the retirement contributions. The 2023 income limits and associated Saver's Credits are:

2023 Saver's Credit Guidelines

AGI for Single Filers For Head of Household For Married Filing Jointly Saver's Credit
$0 to $21,750 $0 to $32,625 $0 to $43,500 50% of the first $2,000 deferred ($4,000 if Married filing jointly)
$21,751 to $23,750 $32,626 to $35,625 $43,501 to $47,500 20% of the first $2,000 deferred ($4,000 if Married filing jointly)
$23,751 to $36,500 $35,626 to $54,750 $47,501 to $73,000 10% of the first $2,000 deferred ($4,000 if Married filing jointly)
more than $36,500 more than $54,750 more than $73,000 credit not available 

Please contact your assigned Old Point Wealth Administrator/Relationship Manager or call us at 757-599-2200 to learn how we can assist you in communicating this to your employees'…

More information on the Saver's Credit is available on the IRS Retirement Savings Contributions Credit website:
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit

 

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

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