ABLEnow customers may be eligible for a tax credit just for making contributions to their ABLE account.
Under the Tax Cuts and Jobs Act of 2017, certain designated beneficiaries of ABLE accounts became eligible for the Retirement Savings Contributions Credit (known as the “Saver’s Credit”). The Saver’s Credit incentivizes low- and moderate-income Americans to save more.
The Saver’s Credit can be applied to up to $2,000 in ABLE contributions for eligible individuals. The credit can be claimed on IRS Form 8880 by individuals who meet the following requirements:
- Are at least 18 years old at the close of the taxable year;
- Are not a dependent or full-time student; and
- In 2023, have an adjusted gross income of:
- $73,000 or less as a married joint filer
- $54,750 or less as a head of household filer
- $36,500 or less as any other filing status
Most tax-preparation software programs will determine eligibility, complete the appropriate forms, and apply the credit automatically. Individuals who are eligible to claim the Saver’s Credit may qualify for the IRS Free File program, which offers free online tax software.
The Saver's Credit is scheduled to expire after December 31, 2025.
ABLEnow cannot and does not provide legal, financial or tax advice, and the foregoing information should not be construed as such with respect to the consequences for any particular individual as a result of contributions or withdrawals from an ABLEnow account. Since each individual’s legal, financial, and tax situation is unique, a qualified professional should be consulted on any of the issues discussed in this article. This article reflects information as of February 1, 2024, and may not reflect changes in law, policies or procedures after that date.
