Q:        I’ve heard I might be able to get a special tax credit because I contributed to my retirement account in 2013. Is that true?
A:        It’s true, if you qualify.  Workers with low- to moderate-income can earn a special federal “saver’s” tax credit, which helps promote retirement savings. Begun in 2002 as a temporary provision, the saver’s credit was made a permanent part of the tax code in legislation enacted in 2006. To help preserve the value of the credit, income limits are now adjusted annually to keep pace with inflation.

Q:        How does the saver’s credit work?
A:        The saver’s credit, also known as the retirement savings contribution credit, helps offset part of the first $2,000 that you voluntarily contribute to an IRA, a 401(k) plan or a similar workplace retirement program. You can get this tax credit in addition to any other tax savings that may apply to you.

Q:        Can I make retirement contributions and get the saver’s credit to use for my 2014 tax return?
A:        Yes. You should schedule your 2014 contributions now so your employer can begin withholding your contributions as soon as possible. To qualify for the saver’s credit on your 2014 tax return, you must contribute by Dec. 31, 2014 to a qualified retirement plan. Qualified plans include a 401(k) plan or similar workplace program such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees.

Q:        Who qualifies for the saver’s credit?
A:        The saver’s credit can be claimed by:

• married couples filing jointly with incomes up to $59,000 in 2013 or $60,000 in 2014;
• heads of household with incomes up to $44,250 in 2013 or $45,000 in 2014; and
• married individuals filing separately and singles with incomes up to $29,500 in 2013 or $30,000 in 2014.

      You cannot take the credit if you are under 18 years of age, if you are claimed as a dependent on someone else’s return, or if you were a full-time student during any part of five calendar months during the tax year.

Q:        If I qualify for the saver’s credit, does that mean I get a bigger refund at tax time?
A:        Not necessarily. Like other tax credits, the saver’s credit can reduce your overall tax liability. It could either increase your refund, or reduce the additional tax you owe. The maximum saver’s credit is $1,000 for an individual and $2,000 for married couples, but any other deductions and credits you claim may reduce the saver’s credit amount quite a bit. In fact, taxpayers who have already reduced their tax bill substantially with other deductions and credits may not benefit from the saver’s credit.

Q:        How does the IRS determine the amount of my saver’s tax credit?
A:        Your credit amount is based on your filing status, your adjusted gross income, your tax liability and the amount you contributed to qualifying retirement programs. You should use Form 8880 to claim the saver’s credit. The form’s instructions will help you figure your credit.

Q:        If I take the saver’s credit, can I still deduct my IRA contributions?
A:        Generally, yes. The saver’s credit supplements other tax benefits available to people who set money aside for retirement. Most workers may deduct their contributions to a traditional IRA. Although you cannot deduct your Roth IRA contributions, qualifying withdrawals from your Roth IRA, usually after retirement, are tax-free. Normally, contributions to a 401(k) or similar workplace plan are not taxed until you withdraw them.

Q:        Where can I get more information about the saver’s credit?
A:        For more information about the credit, visit IRS.gov.

The information for this “Law You Can Use” column was provided by the Internal Revenue Service. It was prepared by the Ohio State Bar Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

Q:       I just realized that I could have claimed a tax credit this year, but I’ve already filed my return. Is there anything I can do?

A:        Yes. You can file an amended return using IRS Form 1040X. If you are eligible to claim a credit, or perhaps a deduction that reduces your tax bill, you should do so.

Q:       What if I’ve made a mathematical error on the tax return I already submitted?

A:        Generally, you do not need to file an amended return to correct mathematical errors because the IRS will automatically make such corrections and send you a printed notice. Also, amended returns should not be filed for forgotten tax forms such as W-2s or schedules; the IRS normally will mail you a notice asking you for any such forms if they are needed.

Q:       What if I’ve forgotten to report income?

A:        If you’ve forgotten to report income, you should file an amended return as soon as possible. The sooner you correct such a mistake, the lower any possible penalties and interest you may owe will be. Reporting the additional income on a 1040X form could save you money in the long run.

Q:       Can I submit a 1040X form electronically?

A:        No. Form 1040X must be filed using the paper form and mailed in. If you are amending more than one tax return, each 1040X form should be mailed in a separate enveloped addressed to the appropriate IRS processing center.

Q:       How much time do I have to file an amended return?

A:        An amended return must be filed within three years from the date of the original return or within two years from the date taxes were paid, whichever is later.

Q:       How long will it take the IRS to process my amended return?

A:        According to the IRS, it generally takes between eight and 12 weeks to process an amended return.

Q:       Where can I find more information?

A:        For more information about amended returns or to print a copy of Form 1040X, go to www.irs.gov and click on the link to Forms and Publications, or visit the IRS YouTube channel: www.youtube.com/watch?v=JUjC0avoZ_I.

The information for this “Law You Can Use” column was provided by the Internal Revenue Service. It was prepared by the Ohio State Bar Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.