Saver’s Credit 2023: What It Is, How to Claim It

The U.S. government launched the Saver’s Credit to encourage low and average earners to save more. In this article, read and find out what the Saver’s Credit 2023 is and how to claim these tax credits!

The U.S. federal government launched the Saver’s Credit in the early 2000s to encourage Americans who earn low to average income to save more. Contributions can already be deducted from a traditional Individual Retirement Account (IRA). However, Saver’s Credit 2023 can also provide tax deductions to some IRA account contributions if the income is below a certain limit.

According to Addessi, the Saver’s Credit 2023 is a percentage of a taxpayer’s contributions. The percentage ranges from 10%, 20%, or 50&. The percentage tier a taxpayer falls into is based in their filing status and adjusted gross income (AGI). For individual filers, the tax credit is worth up to $1,000, while $2,000 can be received by joint filers.

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How to Claim Saver’s Credit 2023

According to O’Shea, to be claim the Saver’s Credit 2023, one must be age 18 and older, not a full-time student, or not claimed as a dependent on someone’s tax return. They must also have made contributions to a traditional IRA, Roth IRA, SIMPLE IRA, ABLE, SARSEP, 401(k), 403(b), 457(b), 501(c)(18) plan. Unfortunately, rollover contributions are not qualified.

The Saver’s Credit 2023 can be claimed using the IRS Form 8880. This form is a one-page form that can be printed out from the Internal Revenue Service (IRS) website. It can be mailed to the agency or filed electronically.

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