IRS Saver’s Credit Helps Workers Save for Retirement

December 16, 2011 (PLANSPONSOR.com) – The Internal Revenue Service (IRS) has issued a reminder for taxpayers to take advantage of the saver's credit for 2011.  

The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.

Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2011 tax return. People have until April 17, 2012, to set up a new individual retirement arrangement or add money to an existing IRA and still receive a credit for 2011. However, elective deferrals must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees and the Thrift Savings Plan for federal employees.

The saver’s credit can be claimed by:

•  Married couples filing jointly with incomes up to $56,500 in 2011 or $57,500 in 2012;

•  Heads of Household with incomes up to $42,375 in 2011 or $43,125 in 2012; and

•  Married individuals filing separately and singles with incomes up to $28,250 in 2011 or $28,750 in 2012.