Savvy Senior

Dear Savvy Senior,

A coworker was recently telling me about a tax credit she got last year for simply contributing to our company’s 401(k) plan. What can you tell me about this, and who’s eligible?

Over 55

Dear Over,

It’s called the “retirement saver’s tax credit,” and it’s a frequently overlooked credit that’s available to low and moderate-income individuals and families who make saving for retirement a priority. Here’s how it works.

If your contribute to a traditional or Roth IRA, or an employer sponsored plan like a 401(k), 457, 403(b), SEP plan, SIMPLE IRA or other retirement-savings plan,...