A New 'Saver's Credit' Makes Its Debut This Year Wall Street Journal (01/02/02) p.A1
An income-tax credit for low- and middle-income
taxpayers outlined in the 2001 tax law is set to make its debut
this year. Among other things, the credit helps to offset the
expense of the first $2,000 contribution taxpayers make to their
IRA or 401(k) plans. The saver's credit can be as high as half
of the taxpayer's contributions, with a maximum per-person credit
of $1,000 a year, or $2,000 for a married couple filing jointly.
J. Mark Iwry, former Treasury benefits tax counsel who helped
draft the credit, says the saver's credit will "help employers
meet their 401(k) nondiscrimination tests," while "allowing more
pretax 401(k) saving by higher-paid employees."