There are many reasons to contribute to MaineSaves—automatic paycheck contributions, professional management of your funds and the peace of mind knowing you’re securing your future. But did you know that you can also benefit from a tax break? That’s right, the IRS allows you to receive a tax credit—called the Saver’s Credit—if you are eligible and you contribute to MaineSaves. To be eligible for the Saver’s Credit, you must be:

  • At least 18 years old,
  • Not a full-time student, and
  • Not claimed as a dependent on someone else’s tax return.

Depending on how much you earn, you may have a tax credit equal to 10%, 20% or 50% of the first $2,000 ($4,000 if married filing jointly) you contribute to the plan. The lower your income, the larger the percentage you receive. The actual percentage is based on your adjusted gross income (AGI) and tax filing status.

Lets say you contribute $1,300 to the Plan each year and are eligible for the maximum 50% credit. If you owe federal income taxes of $1,000, you can take a $650 Saver’s Credit (50% of $1,300) to reduce your tax bill to $350.

2019 Saver’s Credit
If You’re Married Filing Jointly and Your AGI is… If You’re Filing as Head of Household and Your AGI is… All Other Filers* and Your AGI is… This is Your Credit Percentage…
Up to $38,500 Up to $28,875 Up to $19,250 50% of your contribution
$38,501-$41,500 $28,876-$31,125 $19,251-$20,750 20% of your contribution
$41,501-$64,000 $31,126-$48,000 $20,751-$32,000 10% of your contribution
2018 Saver’s Credit
If You’re Married Filing Jointly and Your AGI is… If You’re Filing as Head of Household and Your AGI is… All Other Filers* and Your AGI is… This is Your Credit Percentage…
Up to $38,000 Up to $28,500 Up to $19,000 50% of your contribution
$38,001-$41,000 $28,501-$30,750 $19,001-$20,500 20% of your contribution
$41,001-$63,000 $30,751-$47,250 $20,501-$31,500 10% of your contribution
2017 Saver’s Credit
If You’re Married Filing Jointly and Your AGI is… If You’re Filing as Head of Household and Your AGI is… All Other Filers* and Your AGI is… This is Your Credit Percentage…
Up to $37,000 Up to $27,750 Up to $18,500 50% of your contribution
$37,001-$40,000 $27,751-$30,000 $18,501-$20,000 20% of your contribution
$40,001-$62,000 $30,001-$46,500 $20,001-$31,000 10% of your contribution

 

*Single, married filing separately, or qualifying widow(er)

Note that if you (or your spouse) receive a taxable distribution, the payment could affect the size of your Saver’s Credit. Additional rules apply. For more information, consult your local representative or visit www.IRS.gov and review Publication 4703: Retirement Savings Contributions Credit, and Form 8880: Credit for Qualified Retirement Savings Contributions.