Maximizing the benefits of saving and investing with IL ABLE
Did you know that an Account Owner’s contributions to their IL ABLE Account may be eligible for the Retirement Savings Contributions Credit – also known as the Tax Savers Credit?
What is the Tax Savers Credit?
The Tax Savers Credit is a tax deduction that low to moderate-income taxpayers may be eligible to take – including ABLE Account Owners who contribute to their own Account.
Who is eligible?
To qualify for the Tax Savers Credit, an IL ABLE Account Owner must:
- Be 18 years or older,
- Not be claimed as a dependent on someone else’s tax return,
- Not be a student,
- Meet income requirements, and
- Have contributed to their own ABLE account during the tax year for which a tax return is filed.
How does the Tax Savers Credit Work?
The maximum contribution amount that qualifies for the credit is $2000. Taxpayers, if they are eligible and depending on their adjusted gross income reported on their 1040 tax form, may receive a credit of up to 50% of $2000 in contributions they made to their own an ABLE Account. Rollover contributions do not qualify for the credit and eligible contributions may be reduced by distributions that are made from the Account.
As always, consult with a tax advisor to answer any personal tax questions about your specific circumstances.
Visit the IRS website for more information about the Tax Savers Credit.