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Molly Moorhead
By Molly Moorhead April 30, 2012

New retirement savings credit is a no-go

During the 2008 campaign, Barack Obama promised to give people with low incomes a new incentive to save for retirement. He proposed a tax credit of up to $500 for couples and $250 for singles. But three years later, the idea has gone nowhere.

President Obama included the expansion of the saver"s credit in his 2011 budget request (which was not passed), but the credit hasn"t made an appearance on his agenda since. It"s not mentioned in his proposed 2013 budget. To double-check our conclusion, we talked with G. Barry Wilkinson, a tax attorney and CPA in St. Petersburg, Fla., who said he hasn"t seen a new credit, either.

The Obama campaign did not provide evidence that this promise has been fulfilled, but pointed to the "fairness principles” the president has established in his approach to tax reform, and his advocacy for automatic enrollment in IRA plans.

But for this Obameter promise, the principles don't erase the fact that there's been no action. We rate this a Promise Broken.

Angie Drobnic Holan
By Angie Drobnic Holan January 12, 2011

Obama's budget still asks for "Saver's Credit"

At the end of 2010, President Barack Obama and Senate Republicans negotiated broad-based tax compromise legislation. The tax credit for retirement savings, which Obama calls the "Saver's Credit," was not part of that agreement. But the proposal lives on in the president's 2011 budget proposal, which has still not been passed, and it's possible the measure will be considered later this year.

"This proposal is expected to increase significantly both the number of Americans who save for retirement and the overall amount of amount of retirement wealth they accumulate," states the president's budget document.

We leave the rating at In the Works.

Angie Drobnic Holan
By Angie Drobnic Holan October 5, 2009

Obama proposes expanded saver's credit

In his budget for fiscal year 2010, President Barack Obama proposed a new saver's tax credit.

There are tax breaks in current law for low-income savers, but the tax credits are not refundable. That means if you don't owe any taxes, you don't get cash back. In theory this reduces your incentive to save.

"The proposal would make the saver"s credit fully refundable and would provide for the credit to be deposited automatically in the qualified retirement plan account or (individual retirement account) to which the eligible individual contributed," according to a statement from the U.S. Treasury Department. "Making the saver"s credit more like a matching contribution would enhance the likelihood that the credit would be saved and would increase the salience of the incentive by framing it as a match similar to the familiar employer matching contributions to 401(k) plans."

The Obama administration proposes that this measure would go into effect in 2011. Congress still needs to approve the measure. We rate it In the Works.

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