Retirement savings contributions credit

[Black Bart]

Is there any kind of a school retirement plan that's NOT eligible for the "savers credit"?

I have a schoolteacher's W2. There's nothing in box 12, but box three SS wages are 33K and box one taxable wages are $30K. He (and his paystub) verify that he paid $3K into the plan from his $33K salary. I'm thinking it's a 403B (the usual school-type plan), but neither he nor the bookkeeper (who makes the W2s) know anything (No; I don't know how he got to be a teacher either) other than to say that it's a voluntary, pre-tax plan which I think is enough for me to give him the $200 credit. Still, shouldn't something about it be on the W2? Insights?

[rjholmes]

In our area the school systems have mandatory retirement plans which are not eligible for the credit, and the contributed amount is shown in box 14. I had to call the superintendent's office, as some teachers apparently do not know that it is mandatory.

[KBTS]

Saver's Credit

I believe the saver's credit is designed for voluntary contributions to a retirement plan. I think all PA public school teachers are required to pay into their retirement plan - which is then matched by the school district and/or state. Since this is not a voluntary contribution to a plan, this is not eligible for the saver's credit. Their W-2 looks like you described since the contributions are done pre-tax.

However if the school district also has a 403b plan which the teacher elects to contribute to, then these contributions are eligible for the saver's credit.

[FEDUKE404]

Retirement contribution

As others have noted, only voluntary contributions to an employer's plan count, along with the usual IRA stuff, for the saver's credit. In most cases, assuming the W2s were prepared properly, that allowable amount is shown in Box 12 (along with the appropriate code) of Form W2.

Several years ago there was a major ruckus here where a "knowledgeable" reporter wrote an article for the newspaper (capital city) telling state employees to take the credit. (In this state, 6% of ALL wage income for a state employee automatically goes into the general retirement fund, pre-tax, explaining the difference between gross/taxable wages that exists for all state employees. There is, of course, an optional 403(b) type plan available also, and DCB/cafeteria plans can make even greater reductions on the taxable wages number on the W2.)

The tax folks who knew what the facts were went into apoplexy, as there were clients beating down the door with the newspaper article in hand, demanding their returns be "corrected."

Needless to say, a retraction was offered shortly thereafter.....

FE