Adjusted gross income (AGI) limits have increased for taxpayers who are qualified to claim the Retirement Savings Contribution Credit. A taxpayer’s AGI must be less than $31,500 if Single, Married Filing Separately, or Qualifying Widow(er); $63,000 if Married Filing Jointly; and $47,250 if Head of Household.
The credit amount is 50%, 20%, or 10% of an eligible individual’s retirement plan or IRA contributions up to $2,000 ($4,000 if MFJ). The percentage of the contribution that can be claimed as a credit depends on the taxpayer’s AGI. The credit can offset both regular tax and AMT.
Taxpayers who contribute to the following types of retirement plans are eligible for the retirement savings credit.
*Created as a result of the passage of the Achieving a Better Life Experience (ABLE) Act of 2014. A tax-advantaged savings account available to individuals diagnosed with significant disabilities before age 26. They are designed to help people with disabilities and their families save and pay for disability-related expenses. The funds within the account grow tax-free.