The way it works is simple. If your adjusted gross income is less than $50,000 and you are married filing jointly or you are a single payer earning $25,000 in adjusted gross income, this credit is probably something you can take advantage of this year.

The tax credit is against the first $2,000 you contribute to your employer's plan and is can total up to 50%. Another upside to this credit is that it can be taken in addition to any other credits you may be allowed including the tax benefits you receive for your contribution.

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