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Employees who contribute to a Tax Deferred Annuity (TDA) through payroll deduction can save even more due to a new “saver’s credit” that is available starting this year.
The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) allows most TDA participants who fall within certain income parameters to qualify for the saver’s credit—a tax credit that reduces the federal income tax you pay on a dollar-for-dollar basis. The credit is calculated as a percentage of the first $2,000 you contribute and the percentage is based on your adjusted gross income for 2002, as indicated above.
Even increasing your contribution by as little as $5 a week can have a significant impact on your taxes if you start early in the new year and allow your contributions to build up over time.
If you wish to start a TDA or increase the amount you now contribute, access the enrollment form on-line at (http://is.partners.org/hr/forms/worddocs/bwhsalaryreduc.dot).
For more information, call 617-726-8133 or contact your Human Resources Generalist.