Question

Jack and Kendra are married and file a joint return. The couple has a modified AGI of $59,000. Jack contributed $2,000 to his traditional IRA for the tax year. Neither Jack nor Kendra have ever taken a distribution from a retirement plan. Assuming there is no limitation based on their tax liability, what is the amount of their Saver's Credit?

	$0
	$200
	$400
	$1,000

Answer 1

2019 Saver's Credit

Credit Rate	Married Filing Jointly	Head of Household	All Other Filers*
50% of your contribution	AGI not more than $38,500	AGI not more than $28,875	AGI not more than $19,250
20% of your contribution	$38,501 - $41,500	$28,876 - $31,125	$19,251 - $20,750
10% of your contribution	$41,501 - $64,000	$31,126 - $48,000	$20,751 - $32,000
0% of your contribution	more than $64,000	more than $48,000	more than $32,000

The maximum contribution amount that may qualify for the credit is $2,000 ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly)

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In the given question:-

Return is filed jointly.

AGI is $59000

Therefore, qualifying credit = $4000 or actual, ie $2000, whichever is lower = $2000.

Savers credit = 10% * $2000 = $200

Hence, answer is $200.

Note :

This is for the year 2019