The Internal Revenue Service (IRS) is encouraging qualified taxpayers to make plans now to take advantage of a tax credit designed to help low- and middle-income workers save for retirement. The nonrefundable tax credit provides a credit of up to $1,000 for single filers and $2,000 for contributions to IRAs, 401(k)s, and certain other retirement plans.
For 2012 tax returns, the credit is available for joint returns with adjusted gross income (AGI) of $56,500 or less, head of household returns with AGI of $42,375 or less, and single returns with AGI of $28,250 or less. The individual also must be age 18 and older, not a full-time student, and not claimed as a dependent on another person's tax return.
The amount of the credit you can get is based on the contributions you make and your credit rate. Your credit rate can be as low as 0% or as high as 50%. Your credit rate depends on your income and your filing status. See IRS Form 8880 to determine your credit rate.
For more information about the credit contact the IRS at 800-TAX-FORM or www.irs.gov.