Qualifying for the 401k Tax Credit

The 401k tax credit rewards individuals with low incomes for contributing to their retirement plans. In order to get this tax credit, you will have to meet certain qualifications that are set forth by the government. Here are a few things to consider about qualifying for the 401k tax credit.

Tax Credit

As of 2010, the maximum amount of tax credit that you can get for this program is $1000. This provides you with a 50 percent credit on your maximum $2000 contribution. This thus gives you a $1000 dollar-for-dollar reduction in your tax liability. 

Requirements

In order to qualify for this program, you have to be at least 18 years old. You have to be working, and you cannot be a full-time student at a college or university. You have to file your own tax return and cannot be claimed on anyone else's tax return as a dependent. 

This program also has income requirements that you must meet in order to get the tax credit. If you are an individual, as of 2010, you have to make under $22,500 per year. If you are married and file your taxes jointly, you have to make under $30,000 per year.

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