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. Taxes

    Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  2. 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.
  3. Personal Finance

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  4. 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.
  5. Retirement

    IRA Contributions: Deductions and Tax Credits

    We outline the incentives and help you take full advantage of the benefits.
  6. Taxes

    Tax Credit For Plan Expenses Incurred By Small Businesses

    Determine whether your business is eligible to claim a tax credit for establishing a retirement plan.
  7. 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.
  8. Taxes

    How Obamacare Is Raising Your Taxes

    There are literally dozens of new, amended or broadened tax provisions under the Obamacare legislation. Find out how your taxes will be affected in the years to come.
RELATED TERMS
  1. Tax Credit

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

    Also known as IRS Form 8880, the Credit for Qualified Retirement ...
  3. American Opportunity Tax Credit

    A tax credit that enabled more student and parents to pay for ...
  4. Section 1341 Credit

    A tax credit available for taxpayers who are repaid in a later ...
  5. Roth IRA

    A Roth IRA is an individual retirement plan that bears many similarities ...
  6. Alternative Motor Vehicle Credit

    A tax credit given to individuals who purchase vehicles that ...
Hot Definitions
  1. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  2. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  3. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  4. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  5. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
  6. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
Trading Center