Delete saved User ID
Forgotten Password
Sign On Account Access Security

Tax Talk

February 2014: Credit for Qualified Retirement Savings Contributions

Did you know that you may be able to qualify for a tax credit simply by saving for your future? The Credit for Qualified Retirement Savings Contributions, also known as the "Saver’s Credit", is a tax benefit that provides an incentive for eligible low-to-moderate income taxpayers to save for their own retirement. If you made retirement contributions, you should be aware of this credit and whether or not you qualify.

You may be eligible to claim this credit if you are not a full-time student, are under the age of 65, and you made contributions or voluntary deferrals to one or more of the following tax-advantaged retirement plans:
  • Traditional, SEP or Roth IRA
  • 401(k), 403(b), or government 457 plan
  • SIMPLE IRA or plan
  • Other qualified employer-sponsored retirement plans

The credit amount is calculated based on your income and your filing status. The maximum credit per individual is $1,000, or 50% of your first $2,000 of eligible contributions ($2,000 if married filing jointly and each spouse made eligible contributions to his/her own retirement account). The credit is income-based, so as your income increases, the credit amount decreases. You cannot claim this credit if you are above the income threshold. The following table shows the income parameters for the Saver’s Credit:

Amount of Credit Married filing jointly Head of Household Single and all other filing statuses
50% of contribution/deferral* $0 to $35,500 $0 to $26,625 $0 to $17,750
20% of contribution/deferral* $35,501 to $38,500 $26,626 to $28,875 $17,751 to $19,250
10% of contribution/deferral* $38,501 to $59,000 $28,876 to $44,250 $19,251 to $29,500

*Percentages only apply to up to $2,000 of eligible contributions per individual.
Contributions to traditional or Roth IRAs for tax year 2013 can be made until April 15, 2014. Therefore, you still have time to make retirement contributions that may allow you to claim the credit on your 2013 tax return. You can contact your local branch or the Contact Center at 888-732-8562 for more information on the Saver’s Credit or on traditional and Roth IRAs. Also, tax preparers are available in all SECU locations to help eligible members with their tax preparation needs.

Previous Tax Talk:

  • January 2014 - Tax Filing Season is Here
  • October 2013 - Tax Benefits for Education
  • September 2013 - New Tax Law Enacted in North Carolina
  • August 2013 - Summer Childcare Expenses and the Dependent Care Credit
  • July 2013 – Because charitable donations can potentially provide a benefit on your tax return, you should be aware of the guidelines for deductions.
  • June 2013 – The IRS sends millions of letters and notices to taxpayers each year for a variety of reasons. The Credit Union can help you with these letters.

Related Links

*Quoted rates, dividends, annual percentage yields (APY) and rates (APR) are subject to change daily at the discretion of the Board of Directors.