Stimulus 2022: Get a $2,000 tax break
The IRS is expanding a retirement account tax benefit that may save you up to $2,000 in 2022.
This tax credit is accessible to low- and moderate-income Americans who save for retirement. Per Intuit TurboTax, the Saver’s Credit will cut or even eliminate tax obligations for those who qualify.
Depending on your marital status, the credit can save you up to $1,000. It’s another way to encourage Americans to save for retirement, which they don’t do enough of these days.
Few taxpayers use the credit or even know it exists. The IRS has widened the income range for those eligible for the Saver’s Credit, making it available to more taxpayers in 2022.
You must have an adjusted gross income of $68,000 or less in 2022 if you are married filing jointly, up from $66,000 in 2021. Your AGI must be $51,000 or less in 2022, up from $49,500 in 2021. AGI must be $34,000 or less in 2022, up from $33,000 in 2020.
You qualify for the Saver’s Credit if you:
- Not claimed as a dependant
- Non-student (the IRS considers you a student if during any part of five calendar months you were enrolled as a full-time student at a school or took a full-time, on-farm training course given by a school or a state, county, or local government agency)
Have you contributed to your retirement plan throughout the tax year?
How much you save in a retirement account depends on your income and filing status. People can claim up to $1,000, $400 or $200 in credit. The maximum credit for married couples filing jointly is $2,000 each.
Unlike other tax credits, the Saver’s Credit is not refundable. Contributions to these retirement funds are tax-deductible:
Traditional IRA SEP IRA