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Retirement Saver's Credit
For
2002 there is a new tax credit is called the Retirement Saver's
Credit. It was passed by Congress to encourage retirement
savings.
The
credit is only available up to the amount of tax you owe.
If you do not owe any tax, you can not claim the credit and
get a refund. It is a temporary credit and is only available
for years 2002 through 2006. The credit is graduated and
based on both your filing status and adjusted gross income.
It phases out at certain income levels. The credit is an
applicable percentage amount applied to a maximum of $2,000
in retirement savings contributions. The highest credit amount
is 50% or $1,000. Below is a list of the credit percentage
amounts by filing status and adjusted gross income levels.
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Adjusted
Gross Income
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|
Married Filing Jointly
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Head of Household
|
All Other Taxpayers
|
Applicable Percentage
|
|
Over
|
Not Over
|
Over
|
Not Over
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Over
|
Not Over
|
|
|
---
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$30,000
|
---
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$22,500
|
---
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$15,000
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50%
|
|
$30,000
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$32,500
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$22,500
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$24,375
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$15,000
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$16,250
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20%
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$32,500
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$50,000
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$24,375
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$37,500
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$16,250
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$25,000
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10%
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|
$50,000
|
---
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$37,500
|
---
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$25,000
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---
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No Credit
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We
sent you this letter to inform you of the new tax credit as
a planning tool. This information should help you in deciding
on the amount of next year's contributions to an IRA, 401(k),
tax-deferred annuity or other elective retirement plan. You
were eligible to claim this credit based on your most recent
tax return. If you have any questions, please feel free to
contact us concerning this matter.
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