A:

The saver's tax credit is a non-refundable tax credit available to eligible taxpayers in the U.S. who make contributions to their employer-sponsored 401(k), 403(b), SIMPLE, SEP or governmental 457 plan and/or make contributions to their Traditional and/or Roth IRAs. The saver's tax credit is claimed when you file your tax return for the year.

If your tax return is prepared by a professional, remind him or her that you are eligible for the credit and that he or she must file IRS Form 8880, which is available at the IRS website. If you file your own return, you should complete the form and attach it to your tax return. The credit amount is indicated on the line labeled "retirement savings contributions credit", in the "tax and credits" section of your tax return.

To learn more about taxation and retirement plans, read The Saver's Tax Credit: An Added Incentive To Fund Your Plan, Avoiding IRS Penalties on Your IRA Assets and Retirement Plan Tax Forms You May Need to File - Part 1.


This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS
  1. How do I get credit for my retirement plan contributions?

    There is an added incentive for adding to your retirement nest egg, if your income falls within certain limits. Under this ... Read Answer >>
  2. What are the best ways to pay less income tax?

    Learn about reducing your income tax burden by contributing to an employer-sponsored retirement plan or IRA, and see what ... Read Answer >>
Related Articles
  1. Retirement

    How to Save More for Your Retirement

    Be sure you know all the tax-advantaged ways in which you can save more for retirement.
  2. Taxes

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  3. Taxes

    Important Year-End Tax Moves for 2016 (Part 1)

    Here's part of a year-end tax strategy for 2016, to make the most of your retirement savings plans.
  4. Retirement

    IRA Contribution Limits in 2016

    Find out about the 2016 limits for contributions and income thresholds for individual retirement accounts, including traditional IRAs and Roth IRAs.
  5. Taxes

    Next Season, File Taxes On Your Own

    Master these fundamentals and you'll be doing your own taxes with minimal stress.
  6. Taxes

    Get a 6-Month Tax Extension

    Discover how to get some extra time from the IRS, without paying a hefty penalty for the privilege.
  7. Retirement

    How To Use Your IRA As A Last-Minute Tax Deduction

    While some people are stressing over their taxes, there is a big advantage to delaying the process: You can maximize your 2014 contributions to your IRA.
  8. Taxes

    Tax Credits And Deductions For Parents

    Your children can help you save on your taxes with these credits and deductions.
  9. Taxes

    Strategies for Protecting Your Income from Taxes

    Taxes are difficult to avoid, but there are many strategies you can find to help ward them off a bit. Here are a handful of ways to protect your income.
  10. Retirement

    These IRA Contributions Will Cut Your 2015 Taxes

    No matter how you save for retirement, take advantage of the time between now and April 15, 2016, to add to your nest egg while cutting your tax bill.
RELATED TERMS
  1. Saver's Tax Credit

    A non-refundable tax credit available to lower income individuals ...
  2. Non-Refundable Tax Credit

    A tax credit that can't reduce the amount of tax owed to less ...
  3. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  4. Credit For Qualified Retirement Savings Contribution

    Also known as IRS Form 8880, the Credit for Qualified Retirement ...
  5. Tax Break

    A tax break is a savings on a taxpayer's liability. A tax break ...
  6. Additional Child Tax Credit

    A refundable credit that can be claimed by taxpayers who are ...
Hot Definitions
  1. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  2. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  3. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  4. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the ...
  5. Border Adjustment Tax

    A tax levied on goods based on where they are sold – exported goods are exempt from tax; those imported and sold in the ...
  6. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
Trading Center