Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Dont pass up retirement tax credit
MADISON, Wis. (2/9/11)--Hard to believe, but as many as 88% of taxpayers who could benefit from it don’t even know about the Saver’s Credit. Officially named the Retirement Savings Contribution Credit, the 10-year-old saver’s credit was designed to encourage low- to middle-income workers to save for retirement. But a survey released mid-January by the Transamerica Center for Retirement Studies of 3,598 full- and part-time workers with incomes of less than $50,000 indicates that as few as 12% of those who could benefit from the credit are aware of it (TheStreet Jan. 17). One possible explanation for low awareness is that tax filers must use Internal Revenue Service (IRS) Forms 1040A, 1040, and 1040NR to claim the credit; it is not available if you file using Form 1040EZ. Thus, lower- to middle-income workers, those most likely to use 1040EZ and eligible for the credit, may miss it or remain unaware of it. An eligible worker can apply the credit to the first $2,000 of voluntary contributions to a 401(k) or similar employer-sponsored retirement plan or individual retirement account (IRA). There are credits of up to $1,000 for single filers and $2,000 for married couples. The saver's credit is available to workers aged 18 years and older who contributed to a company-sponsored retirement plan or IRA in the past year and are:
* Single or married filing separately, with adjusted gross income (AGI) of up to $27,750 in tax year 2010 or $28,250 in 2011. * Head of a household with AGI of up to $41,625 in 2010 and $42,375 in 2011. * Married and filing a joint return with AGI of up to $55,500 in 2010 or $56,500 in 2011.
You may not claim the saver’s credit if you’re a full-time student or claimed as a dependent on someone else’s return. If you use tax preparation software, look for prompts that refer to the saver’s credit, retirement savings contributions credit, or credit for qualified retirement savings contributions. If you work with a professional tax preparer, make sure he or sure is knowledgeable about the credit. And if you prepare your own forms, complete Form 8880 to determine the credit rate and amount; transfer that amount to the appropriate line on Form 1040A, 1040, or 1040NR. Remember, the credit is not available using Form 1040EZ. For more information, listen to “Save Money With Do-It-Yourself Tax Prep Online Software and Programs” and view “Getting Tax Records Organized” in Home & Family Finance Resource Center.
Other Resources


News Now LiveWire
A recent report from @TransUnion says consumers born 1981 or later made up 27% of total auto-loan originations in 2014, up 16% from 2009.
20 hours ago
.@CUNA says new House bill is "further evidence" of lawmakers' interest in how @TheNCUA uses its funds from CUs. See News Now Monday.
1 day ago
.@MECreditUnions announces winner of @YoungFreeME #SoundOff contest. @Sassquatch_Band will play Old Port Festival in June @PDD_Downtown
15 hours ago
House Financial Services Com. to hold March 3 hearing to receive the semi-annual report of @CFPB Director Richard Cordray.
15 hours ago
Rep. Jeff Miller (R-Fla.) re-introduced bill to ease veterans' access to loans for #smallbusiness purposes from a #creditunion (HR 1133)
17 hours ago
150x172_Sign up for election newsUnite for Good Share your Stories100 Million CU Memberships