A federal tax reduction worth up to $1,000 is being missed by millions of Americans.
This reduction is known as the saver’s credit, or retirement savings contributions credit, and goes to workers that save money in a retirement account while earning a low wage.
These are given for people using 401ks, IRAs, and ABLEs.
Many households that could claim it do not. In 2014 7.4 million taxpayers remembered to cash in on the reduction.
Data says that 30 million taxpayers qualify, meaning well over 20 million are not claiming it.
In order to qualify, people need to be 18 or older, not a full time student, and must not have claimed a dependent or been claimed as a dependent.
Income must be under $66,000 for married couples filing jointly, $49,500 for HOH, and under $33,000 for everyone else.
The thresholds change often.
The tax credit is given based on adjusted income and can be worth up to $1,000, and is considered non-refundable. This means it can reduce a tax bill but not be given as a refund.
To qualify taxes must be filed on a 1040, 1040A, or 1040NR with the IRS form 8880.
Related: You might owe the IRS money if they sent you a letter about an error in your stimulus check
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