IRA Tax Credit For 2010
What is it?
Families at lower to moderate income levels have a tax
incentive to save for retirement. Eligible participants of
Traditional IRAs, Roth IRAs, and 401(k) plans are allowed
to receive a tax credit of up to $1,000 for their contribution
(up to $2,000 per spouse if filing jointly).
Who is eligible?
To qualify for the tax credit, the IRA holder must:
Be 18 years old before the end of the taxable year
Not be a full-time student or a dependent
Be within the following Adjusted Gross Income (AGI) limits
2010 Taxpayers Adjusted Gross Income
Single Filers and Head of
Joint Return * Tax Credit %
other cases Household
Up to $16,750 Up to $25,125 Up to $33,500 50%
$16,751 to $18,000 $25,126 to $27,000 $33,501 to $36,000 20%
$18,001 to $27,750 $27,001 to $41,625 $36,001 to $55,500 10%
$27,751 and over $41,626 and over $55,501 and over 0
*The tax credit can only be applied to the first $2,000 of the contribution.
How does it work?
Suppose you are married and filing a joint tax return. Your combined adjusted gross
income for 2010 is $35,000. If both you and your spouse make your $5,000 contribution
to either a Roth or Traditional IRA, you would be eligible for a $400 per spouse (20% of
$2,000) non-refundable tax credit. If the contribution is to a Traditional IRA, your
contribution would also be fully tax deductible.
Talk to a Retirement Specialist at People’s United. Call 1-800-772-1090 or visit your branch
The above is general information regarding the IRA tax credit, and does not take your unique, personal circumstances into
account. It is not intended to be complete and should not be relied upon in making final decisions concerning IRA accounts. The
information is not meant to constitute legal or tax advice. Please contact your tax professional for full details or visit the IRS
website at www.irs.gov. Rev. 12/09