You may be eligible for an income tax credit of up to $1,000 ($2,000 if married filing jointly) just by contributing to your MNDCP account. It's called the Saver's Tax Credit.
The amount of the credit is determined by your filing status, your adjusted gross income (AGI), and contributions to a qualifying retirement plan, like your MNDCP account. You may not take the credit if, during 2020, you were under age 18, or were a full-time student, or are claimed as a dependent on someone else's 2020 tax return.
Use the chart below to determine the percentage of the allowable credit for 2020.
Married Filing Jointly
|$0 - $39,000||$0 - $29,250||$0 - $19,500||50% of your contribution*|
|$39,001 - $42,500||$29,251 - $31,875||$19,501 - $21,250||20% of your contribution*|
|$42,501 - $65,000||$31,876- $48,750||$21,251 - $32,500||10% of your contribution*|
|$65,001 & over||$48,751 & over||$32,501 & over||0%|
If you qualify, complete IRS Form 8880 and attach it to your federal tax return. Form 8880 includes instructions on how to calculate the credit correctly. IRS publications and tax forms can be downloaded at http://www.irs.gov/.