Saving for retirement is always a good thing. It’s even better, though, when the government pays you back for saving. The purpose of the saver’s credit is to give lower-income workers an incentive to save for retirement.
As explained in this article from the San Jose Mercury News, the saver’s credit is available to taxpayers who earn up to $26,500 for single filers, $39,750 for head of household and $53,000 for couples filing a joint return. As automatic enrollment plans are becoming more popular, more employees are contributing to their retirement and therefore, may be eligible for the credit – often without realizing it.
NADART offers this notice (pdf) to assist employers in explaining the credit to their employees. If your company offers a 401(k) plan, it may help increase participation, and reduce refunds for Highly Compensated Employees.
If you’d like to learn more about NADART’s retirement plan services or the saver’s credit, please contact (800) 462-3278, ext. 7161 or e-mail nadart401k@nada.org.