What The Saver’s Credit Is Worth

The saver’s credit is more or less worth up to $1,000 if you are not married. But if you are married then it is worth up to $2,000.

However the saver’s credit isn’t the same thing as tax deduction. In a way it is better. Because while a tax deduction just reduces the amount of your income which is subject to taxes. A tax  credit reduces your actual tax bill dollar-for-dollar. 

The way the value of it is  calculated is through your contributions to a 401(k),  ABLE account, 457(b) plan, Roth IRA, 403(b), SIMPLE IRA or SARSEP. And based on your contributions  you may be eligible for either 10%, 20% or even 50% of the maximum contribution amount. But this depends on your filing status and adjusted gross income.

And to qualify for the saver’s credit your contribution must be new money. In simpler words it means that it must be a rollovers from an existing account don’t count.

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