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The Retirement Savings Contribution Credit, also known as the Saver’s Credit, is a tax credit worth up to $1,000 (or $2,000 if you’re married filing together) for low- and moderate-income taxpayers. The Saver’s Credit went into effect in 2002 as a temporary provision and was made permanent in 2006 as a way to encourage Americans to contribute to their retirement savings. Learn about the Saver’s Credit claiming rules, eligibility, how much you can earn and upcoming changes.
How Does the Saver’s Credit Work?
If you make contributions to an employer-sponsored retirement plan or an individual retirement account (IRA), you could qualify for the Saver’s Credit. From now until 2025, the Tax Cuts and Jobs Act also allows taxpayers to claim the Saver’s Credit on contributions to their own Achieving a Better Life Experience (ABLE) accounts.
The Saver’s Credit is a tax credit, which can reduce the amount of taxes you owe. But keep in mind that the credit is “nonrefundable” so it can’t give you refund. If you’re eligible, you can claim the credit with IRS Form 8880 “Credit for Qualified Retirement Savings Contributions” and Form 1040.
Retirement account contributions — not rollovers — of up to $2,000 (or $4,000 if you’re married filing jointly) can qualify you for the credit.
You can qualify for the Saver’s Credit if you’re:
- 18 or older
- Not claimed as a dependent on someone else’s return
- Not a student
Not all taxpayers know about the Saver’s Credit. In fact, in 2021 only 48% of workers at for-profit companies had heard of the credit, according to a study from the Congressional Research Service.
If you contributed to an employer-sponsored retirement plan or IRA within the last year and you’re eligible but you’re not claiming the credit, you could be leaving money on the table.
Saver’s Credit Potential Worth
The Saver’s Credit is worth up to $1,000 (or $2,000 if you’re married filing jointly), but you’re not guaranteed to receive that maximum amount. Depending on what your adjusted gross income (AGI) is, you’ll be eligible to claim 50%, 20% or 10% of up to $2,000 that you contribute to your retirement savings account.
Saver’s Credit 2023 income limits (for taxes filed in 2024)
| Married, filing jointly | Head of household | All other filers* | You can claim: |
| $43,500 or below | $32,625 or below | $21,750 or below | 50% of your contribution |
| $43,501- $47,500 | $32,626 – $35,625 | $21,751 – $23,750 | 20% of your contribution |
| $47,501 – $73,000 | $35,626 – $54,750 | $23,751 – $36,500 | 10% of your contribution |
| more than $73,000 | more than $54,750 or more | more than $36,500 or more | 0% of your contribution |
Source: IRS
Saver’s Credit 2024 income limits (for taxes filed in 2025)
| Married, filing jointly | Head of household | All other filers* | You can claim: |
| $46,000 or below | $34,500 or below | $23,000 or below | 50% of your contribution |
| $46,001- $50,000 | $34,501 – $37,500 | $23,001 – $25,000 | 20% of your contribution |
| $50,001 – $76,500 | $37,501 – $57,375 | $25,001 – $38,250 | 10% of your contribution |
| more than $76,500 | more than $57,375 or more | more than $38,250 or more | 0% of your contribution |
Source: IRS
For example, let’s say Laisha is a single filer who earned $21,000 in 2023. If Laisha contributed $1,000 to her traditional IRA, her AGI will be $20,000 after deducting her IRA contribution.
Laisha may claim a 50% credit of $1,000 ($500) for her IRA contribution on her 2023 tax return.
IRS Form 8880 can help you determine how much you can claim based on your income and contributions.
| How to Claim the Saver’s Credit |
| You can claim the Saver’s Credit on Form 1040, U.S. Individual Income Tax Return or Form 1040-SR U.S. Tax Return for Seniors. Attach Form 8880. |
Future Changes to the Saver’s Credit
The SECURE 2.0 Act created the Saver’s Match, which is set to replace the Saver’s Credit in 2027. Instead of receiving a tax credit, those eligible will receive matches for the money they contribute to retirement accounts.
The Saver’s Match eligibility requirements are far simpler than those of the Saver’s Credit.
Individuals with modified AGIs of less than $20,500 (or less than $41,000 for married couples filing jointly) will qualify for a 50% match on up to $2,000 in retirement savings. Those who earn up to $15,000 more than this threshold ($30,000 more for married couples filing jointly) will qualify for a reduced match.
Unlike the Saver’s Credit, the Saver’s Match AGI thresholds do not exclude the value of contributions to qualified retirement accounts. And while the Saver’s Credit lets taxpayers contribute more cash out of pocket, which can qualify them for a larger credit, the same won’t go for the Saver’s Match. The match also won’t be limited to a saver’s income tax liability, meaning that people with no federal income tax liability would still have an incentive to save.
Sources:
IRS. (2024, February 13). Topic No. 610, Retirement Savings Contributions Credit. Retrieved from https://www.irs.gov/taxtopics/tc610
IRS. (2024). 2024 Limitations Adjusted as Provided in Section 415(d), etc. Retrieved from https://www.irs.gov/pub/irs-drop/n-23-75.pdf
Congressional Research Service. (2023, December 15). The Retirement Savings Contribution Credit and the Saver’s Match. Retrieved from https://crsreports.congress.gov/product/pdf/IF/IF11159
IRS. (2023, August 23). Retirement Savings Contributions Credit (Saver’s Credit). Retrieved from https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit
