If you plan to retire by building a savings plan through an IRA or 401 (k) plan, there is a good chance that you can qualify for a special tax credit. The Saver’s credit is available to pensioners and can help reduce your tax liability. The Saver’s Credit, also known by its extended name, The Retirement Savings Contribution Credit, can provide a maximum benefit of up to $2,000 for married couples who file together ($1,000 for individual taxpayers). The eligibility requirements are based on your annual revenue and your selected filing status.

In order to qualify for the 2018 tax year, the following criteria must be met: A single taxpayer or married couple filing separately, who earned no more than $30,000 Filing as head of the household with an annual income of up to $45,000 Married Filing Jointly taxpayers who have a combined income of up to $60,000 The Saver’s Credit has additional rules that may affect your credit. You must be at least 18 years old and not a full-time student for the year. You can’t also be listed as a dependent on the return of anyone else. Obviously, if you want to claim the benefit on your tax return, you must have actually put money into workplace retirement savings, such as a 401 (k) or similar by the end of 2018. Contributions to an IRA may be claimed as late as the due date for tax returns, typically 15 April 2019. You must file Form 8880, Credit for Qualified Retirement Savings Contributions, in order to claim the credit. Many tax software programs will do this for you if you choose to e-file. The Saver’s Credit is just one of several tax savings that you can benefit from if you save later. You can also deduct any contributions to a traditional IRA.