Bookmark and Share [ [link removed] ]

a { color:#0073AF !important;} a:hover { color:#004673 !important;}
IRS.gov Banner
IRS Newswire December 21, 2022

News Essentials

What's Hot [ [link removed] ]

News Releases [ [link removed] ]

IRS - The Basics [ [link removed] ]

IRS Guidance [ [link removed] ]

Media Contacts [ [link removed] ]

Facts & Figures [ [link removed] ]

Around The Nation [ [link removed] ]

e-News Subscriptions [ [link removed] ]

________________________________________________________________________

The Newsroom Topics

Multimedia Center [ [link removed] ]

Noticias en Espa?ol [ [link removed] ]

Radio PSAs [ [link removed] ]

Tax Scams [ [link removed] ]

The Tax Gap [ [link removed] ]

Fact Sheets [ [link removed] ]

IRS Tax Tips [ [link removed] ]

Armed Forces [ [link removed] ]

Latest News Home [ [link removed] ]

________________________________________________________________________

IRS Resources

Contact My Local Office [ [link removed] ]

Filing Options [ [link removed] ]

Forms & Instructions [ [link removed] ]

Frequently Asked Questions [ [link removed] ]

News [ [link removed] ]

Taxpayer Advocate [ [link removed] ]

Where to File [ [link removed] ]

IRS Social Media [ [link removed] ]

________________________________________________________________________


Issue Number:? ? IR-2022-224

Inside This Issue
________________________________________________________________________

*Save for retirement now, get a tax credit later: Saver?s Credit higher limits can help low- and moderate-income workers save more in 2023*

WASHINGTON ?The Internal Revenue Service reminds low- and moderate-income workers that they can save for retirement now and possibly earn a special tax credit in 2022 and years ahead.

The Retirement Savings Contributions Credit, also known as the Saver?s Credit, helps offset part of the first $2,000 workers voluntarily contribute to Individual Retirement Arrangements, 401(k) plans and similar workplace retirement programs. The credit also helps any eligible person with a disability who is the designated beneficiary of an Achieving a Better Life Experience (ABLE) account, contribute to that account. For more information about ABLE accounts, see Publication 907 [ [link removed] ], available on IRS.gov.

The Saver?s Credit is available in addition to any other tax savings that apply.

*Still time to take action*

Eligible workers still have time to make qualifying retirement contributions and get the Saver?s Credit on their 2022 tax return. People have until April 18, 2023 - the due date for filing their 2022 return - to set up a new IRA or add money to an existing IRA for 2022. Both Roth and traditional IRAs qualify.

On the other hand, those participating in workplace retirement plans must take action by the end of 2022 for contributions to count for this year. This means elective deferrals (contributions) must be made by December 31 to a:


* 401(k) plan.
* 403(b) plan for employees of public schools and certain tax-exempt organizations.
* Governmental 457 plan for state or local government employees.
* Thrift Savings Plan (TSP) for federal employees.

Contributions to certain other workplace retirement plans also qualify. See the instructions to Form 8880 [ [link removed] ] for details.

Employees unable to set aside money this year may want to schedule their 2023 contributions soon so their employer can begin withholding them in January.

*Who qualifies*

Income limits, based on a taxpayer?s adjusted gross income and marital or filing status, apply to the Saver?s Credit [ [link removed] ]. But due to inflation, the limits will increase markedly in 2023.

As a result, the Saver?s Credit can be claimed by:


* Married couples filing jointly with incomes up to $68,000 in 2022 or $73,000 in 2023.
* Heads of household with incomes up to $51,000 in 2022 or $54,750 in 2023.
* Married individuals filing separately and singles with incomes up to $34,000 in 2022 or $36,500 in 2023.

Like other tax credits, the Saver?s Credit can increase a taxpayer?s refund or reduce the tax owed. Though the maximum Saver?s Credit is $1,000 ($2,000 for married couples), the IRS cautioned that it is often much less and, due in part to the impact of other deductions and credits, may, in fact, be zero for some taxpayers.

A taxpayer?s credit amount is based on their filing status, adjusted gross income, tax liability and amount contributed to qualifying retirement programs or ABLE accounts. Form 8880 [ [link removed] ] is used to claim the Saver?s Credit, and its instructions have details on figuring the credit correctly.

In tax year 2020, the most recent year for which complete figures are available, Saver?s Credits totaling more than $1.7 billion were claimed on about 9.4 million individual income tax returns. That?s an average of about $186 per eligible return.

The Saver?s Credit supplements other tax benefits available to people who set money aside for retirement. For example, most workers may deduct their contributions to a traditional IRA. Though Roth IRA contributions are not deductible, qualifying withdrawals, usually after retirement, are tax-free. Normally, contributions to 401(k) and similar workplace plans are not taxed until withdrawn.

*Some restrictions apply*

Other special rules that apply to the Saver?s Credit include:


* Eligible taxpayers must be at least 18 years of age.
* Anyone claimed as a dependent on someone else?s return cannot take the credit.
* A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student.

Any distributions from a retirement plan or ABLE account reduce the contribution amount used to figure the credit. For 2022, this rule applies to distributions received after 2019 and before the due date, including extensions, of the 2022 return. Form 8880 and its instructions have details on making this computation.

To learn more about other ways to get ready for the tax season ahead, visit IRS.gov/getready [ [link removed] ].

Back to Top [ #Fifteenth ]

________________________________________________________________________

FaceBook Logo [ [link removed] ]??YouTube Logo [ [link removed] ] ?Instagram Logo [ [link removed] ]? Twitter Logo [ [link removed] ] ?LinkedIn Logo [ [link removed] ]

________________________________________________________________________

Thank you for subscribing to the IRS Newswire, an IRS e-mail service.

If you know someone who might want to subscribe to this mailing list, please forward this message to them so they can subscribe [ [link removed] ].

This message was distributed automatically from the mailing list IRS Newswire. *Please Do Not Reply To This Message.*



?

________________________________________________________________________

Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page [ [link removed] ]. You will need to use your email address to log in. If you have questions or problems with the subscription service, please contact subscriberhelp.govdelivery.com [ [link removed] ].

This service is provided to you at no charge by the Internal Revenue Service (IRS) [ [link removed] ].


body .abe-column-block {min-height: 5px;} ________________________________________________________________________

This email was sent to [email protected] by: Internal Revenue Service (IRS) ? Internal Revenue Service ? 1111 Constitution Ave. N.W. ? Washington DC 20535 GovDelivery logo [ [link removed] ]
body .abe-column-block { min-height: 5px; } table.gd_combo_table img {margin-left:10px; margin-right:10px;} table.gd_combo_table div.govd_image_display img, table.gd_combo_table td.gd_combo_image_cell img {margin-left:0px; margin-right:0px;}