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Are You Eligible for a Tax Credit?
May 8, 2007, Volume 53, No. 33

Are You Eligible for a Tax Credit?

If you’re currently saving under the University’s retirement plans, you may be eligible for a tax credit!  If you meet certain income limits (see table below), up to $1,000 of your retirement savings could be returned as a tax credit—a dollar-for-dollar reduction in the amount of taxes that you owe.

There are limitations, however. The credit only offsets taxes you owe, so if you don’t owe taxes, you can’t get the credit. Any taxable withdrawals from your plan within two years can also count against the credit.

Example:  Kathy joins her employer’s savings plan and contributes $2,000 for the calendar year. Because she’s single and her modified adjusted gross income is less than $15,500, she is eligible for a $1,000 tax credit. This credit reduces the amount of tax that she owes by $1,000 at tax-filing time.

Saver’s Tax Credit for Calendar Year 2007

Modified Adjusted Gross Income

Credit %

Maximum Tax Credit*

Married Filing Jointly

Head of Household


$0 - $31,000

$0 - $23,250

$0 - $15,500



$31,000 - $34,000

$23,250 - $25,500

$15,500 - $17,000



$34,000 - $52,000

$25,500 - $39,000

$17,000 - $26,000




* The maximum contribution taken into account for an individual is $2,000.
Source:  Internal Revenue Service

For more information about the saver’s tax credit, visit the Internal Revenue Service’s website at www.irs.gov.

  —Division of Human Resources

Almanac - May 8, 2007, Volume 53, No. 33