Question

Julio and Lynn are married and will file a joint return. Julio earned 35000 and he contributed 2000 to his 401k plan at work, Lynn earned 5000 and she contributed 1000 to her 401k plan. they have three dependants and their AGI is 37000. their tax liability is 530 and they had a child and dependant care credit of 530. what is the amount is their retirement savings contribution credit?
a) 530
b) 0
c) 1000
d) 600

Answer 1

​​As per the table below, for 2017 they must have tax credit of 50% of contributions of $ 3000 i.e. $ 1500 but since they have dependant care credit of $ 530 and tax liability of $ 530 only, they will get zero credit for retirement savings contribution credit​. Thus answwer is Option B 2017 Saver's Credit
Credit Rate	Married Filing Jointly	Head of Household	All Other Filers*
50% of your contribution	AGI not more than $37,000	AGI not more than $27,750	AGI not more than $18,500
20% of your contribution	$37,001 - $40,000	$27,751 - $30,000	$18,501 - $20,000
10% of your contribution	$40,001 - $62,000	$30,001 - $46,500	$20,001 - $31,000
0% of your contribution	more than $62,000	more than $46,500	more than $31,000