The Saver’s Credit
On December 21, 2022, the IRS released a bulletin “IR-2022-224” informing low and moderate-income workers that they may be eligible for what’s known as the Saver’s Credit.
This credit allows taxpayers to offset a portion of the first $2,000 that they contribute to qualified retirement accounts. These accounts have different dates that contributions must be made. December 31 has already passed, meaning any contributions to a 401(k), 403(b), Governmental 457 plan, or to a Thrift Savings Plan won’t qualify for the 2022 return. But, setting up a new IRA or adding money to an existing IRA would still qualify as the deadline for these plans is April 18, 2023.
Not everyone will qualify for the Saver’s Credit as there are income limits that the taxpayer must not exceed.
· Married couples filing jointly
o $68,000 for 2022
o $73,000 for 2023
· Heads of Household
o $51,000 for 2022
o $54,750 for 2023
· Married individuals filing separately and Single taxpayers
o $34,000 for 2022
o $36,500 for 2023
To be eligible the taxpayer must be at least 18 years of age, cannot be claimed as a dependent, and must not be classified as a student.
For more information on the Saver’s Credit, please reach out to the Professionals at The Center for Financial, Legal, & Tax Planning Inc. at (618) 997-3436.