Question

1) Martha (53) works part-time. in addition, she is taking classes at local university. This year, Martha was enrolled in seven hours for one semester and three for another. The university considers 12 credit hours to be full time. Martha deferred $4,000 of compensation through her employer's 401(k) plan, her AGI for 2018 was $30,500. How much is Martha's Saver's Credit, assuming no tax liability limit applies?

A)$0 B)$400 C)$800 D)$2,000

2) in 2018, Elysia (38) contributed $2,000 to a traditional IRA. She is single, and her modified adjusted gross income(MAGI) is $30,000, all from wages. Elysia has never taken a distribution from any retirement account. She is potentially eligible for a retirement savings contribution credit (Saver's Credit) of up to-----

A)$0 B)$200 C)$400 D)$1,000

Answer 1

1. Option A ($0)

Rule : The Saver’s Credit can be taken for your contributions to a traditional or Roth IRA; your 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans.

Martha is eligible for the credit if she is:

1. Age 18 or older;
2. Not a full-time student; and
3. Not claimed as a dependent on another person’s return.

2. Option D ($1000)

Rule

Rule : The Saver’s Credit can be taken for your contributions to a traditional or Roth IRA; your 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans.

Martha is eligible for the credit if she is:

1. Age 18 or older;
2. Not a full-time student; and
3. Not claimed as a dependent on another person’s return.

The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA or ABLE account contributions depending on your adjusted gross income (reported on your Form 1040 series return). 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). Use the chart below to calculate your credit.

2018 Saver's Credit

Credit Rate	Married Filing Jointly	Head of Household	All Other Filers*
50% of your contribution	AGI not more than $38,000	AGI not more than $28,500	AGI not more than $19,000
20% of your contribution	$38,001 - $41,000	$28,501 - $30,750	$19,001 - $20,500
10% of your contribution	$41,001 - $63,000	$30,751 - $47,250	$20,501 - $31,500
0% of your contribution	more than $63,000	more than $47,250	more than $31,500