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By Rosemary Heins, University of Minnesota Extension
ST. PAUL, Minn. (4/7/2008) — The Retirement Savings Contribution Tax Credit was new in 2002. It reduces or eliminates the income tax a taxpayer may owe. This also encourages people to contribute to retirement plans or an IRA. A taxpayer can receive a tax credit of up to 50 percent of a maximum $2,000 contribution.
For example, if a taxpayer makes a $1,000 contribution to their employer’s retirement plan, their taxable income is reduced by $1,000. They may also claim up to a $500 credit.
Who is eligible? The taxpayer must be at least 18 years old, not be a full-time student and cannot be claimed as a dependent on someone else’s tax return.
The income limitations are as follows:
The adjusted gross income must be not higher than:
$52,000 if married, filing jointly
$39,000 if filing as head of household or
$26,000 if filing single or married filing separately.
Any use of this article must include the byline or following credit line:
Rosemary Heins is a family resource educator with University of Minnesota Extension.
Media Contact: Catherine Dehdashti, U of M Extension (612) 625-0237, ced@umn.edu
NOTE: News releases were current as of the date of issue. If you have a question on older releases, use the news release search (upper left-hand column of the News main page) or the main Extension search (upper right of this page) to locate more recent information.
