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Tax Saver's Credit

You may qualify for a saver's tax credit of up to $1,000 if you:

  • are 18 or older
  • are not a full-time student
  • are not claimed as a dependent on someone else's tax return
  • have adjusted gross income falling within IRS limits

By participating in your employer's retirement plan, you may be eligible for a saver's tax credit. It's an IRS credit which could reduce what you owe at tax time.

How the Saver's Credit Works.

If you make contributions to your employer's retirement plan and meet certain income requirements, you may qualify for a federal tax credit of up to $1,000 ($2,000 if married, filing jointly). Based on your annual contributions, your adjusted gross income (AGI), and your filing status, your tax credit can range from 10 to 50 percent of your plan contributions—the lower your income, the higher the credit rate.

Here's a hypothetical example: If you and your spouse contributed $2,000 each to your retirement plan in 2012, are filing jointly and have an AGI of $36,000, you may be eligible for a 20% tax credit on your combined $4,000 contribution, or $800. That means if your total 2012 tax liability was $2,400, you would only owe $1,600.*


Saver's Tax Credit for 2012 & 2013 Tax Years

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For more information about the saver's credit and other benefits of your employer's retirement plan, contact your benefits administrator or call your Hartford representative.

 

 

Many tax planning strategies emphasize the deferral of current income taxes, on the basis that your federal income tax rate may be lower at retirement. Please keep in mind that federal income tax rates are unpredictable and may be higher when you take a distribution than at the time of deferral. Other factors, including state tax rates and your income, may also affect your overall tax rate upon distribution. Please consult with your tax advisor for individual tax planning strategy and advice. The Hartford does not predict or in any way guarantee favorable tax results.

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. This information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY - MAY LOSE VALUE - NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE

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