Question

Jerry and Ellen are married filing jointly with AGI of $45,000. They made a $1,690 contribution to a qualified retirement plan. How much is their retirement savings contributions credit? Use Table 9-2. Multiple Choice Ο $0. Ο $169. Ο $338. Ο $845.

Answer 1

Answer) Option B ($169) as their salary is in the bracket of $41,501 - $64,000(refer to table bellow)

Rule

The saver's tax credit is a non-refundable tax credit available to eligible taxpayers who make salary-deferral contributions to employer-sponsored 401(k), 403(b), SIMPLE, SEP, or governmental 457 plan, and/or make contributions to traditional and/or Roth IRAs. Starting in 2018, contributions to ABLE accounts, which are tax-advantaged savings accounts for people with disabilities and their families, are also eligible.The credit is worth 10%, 20%, or 50% of your eligible contribution, up to a total of $2,000 ($4,000 if married filing jointly), which means it can't be more than $1,000 (or $2,000 if married filing jointly;. The maximum credit amount is the less then either $1,000 or the tax amount you would have had to pay without the credit. Refundable credits and the adoption credit are not taken into consideration in determining the amount of the saver's credit.

2019
Credit Rate	Married and Files a Joint Return	Files as Head of Household	Other Filers
50%	Up to $38,500	Up to $28,875	Up to $19,250
20%	$38,501 – $41,500	$28,876 – $31,125	$19,251– $20,750
10%	$41,501 – $64,000	$31,126– $48,000	$20,751 – $32,000
0%	More than $64,000	More than $48,000	More than $32,000