Saver's Credit for Retirement Savers
The Saver's Credit, also called the Retirement Savings Contributions Credit, is a little-known IRS tax credit that pays you to save for retirement. Find out if you are eligible to claim it and boost your retirement tax savings.
The Saver's Credit will be available through tax year 2026. It will be replaced by the Saver's Match, a new federal government matching contribution for eligible retirement savers, beginning in 2027.
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What is the Saver's Credit?
The Saver's Credit is a nonrefundable IRS tax credit that may be applied up to the first $2,000 of voluntary contributions that you make to eligible retirement accounts. It is a dollar-for-dollar reduction of your federal income tax liability, and can reduce the amount you owe or increase your refund for taxes already paid. This retirement savings tax credit is in addition to tax deductions and tax-deferred growth on retirement savings — a triple tax benefit.
How to Claim the Saver's Credit?
Step 1
Check Eligibility
You must be age 18 years or older, not a full-time student, not claimed as a dependent on another person's return, and meet the Adjusted Gross Income (AGI) requirements:
Saver's Credit limits for tax year 2025
- Single filers: $39,500
- Head of household: $59,250
- Married filing jointly: $79,000
Saver's Credit limits for tax year 2026
- Single filers: $40,250
- Head of household: $60,375
- Married filing jointly: $80,500
Step 2
Save for Retirement
Types of eligible contributions to tax-advantaged retirement accounts include:
- Traditional or Roth IRA,
- Workplace retirement plans such as a 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan, and
- ABLE account by the designated beneficiary.
- Note: Rollover contributions aren't eligible. Your eligible contributions may be reduced by any recent distributions you received from an employer-sponsored retirement plan, IRA, or ABLE account.
Step 3
Calculate Credit Amount
The amount of the tax credit you can receive is based on your eligible retirement contributions and your "credit rate."
Your credit rate can be as low as 10% or as high as 50%, depending on your income and filing status.
That's a maximum credit of up to $1,000 for single filers or individuals and up to $2,000 for married couples filing jointly.
The average amount of the Saver's Credit was $194 in 2022, according to an analysis of IRS data by TCRS.
Tax Tips for Claiming the Saver's Credit
Easily Check Your Eligibility: The IRS offers an Interactive Tax Assistant Tool to help determine if you can receive the Saver's Credit. It will ask for information such as your filing status, AGI, age, and dependent and student status.
File Your Taxes for Free: If you're eligible for the Saver's Credit, you may also be eligible for the IRS Free File program. The IRS provides free online and guided tax preparation services to tax filers with an AGI of $89,000 or less for the 2025 tax year. Comparison shop among participating tax software providers and review any additional restrictions. For example, be sure to check whether your selected tax prep tool supports the Form 8880 for claiming the Saver's Credit and if any additional fees may apply.
Complete the Saver's Credit Tax Form: Use the Form 8880, "Credit for Qualified Retirement Savings Contributions," to calculate your exact credit amount on line 12. Then, transfer that amount to line 4 on Schedule 3, which is used with Form 1040, 1040-SR (with Schedule 3), or 1040-NR to file your taxes.
Boost Your Savings: If you receive a tax refund, consider contributing it back into an IRA to boost your retirement savings. To direct deposit your entire refund into your IRA, simply fill out the refund section on lines 34 to 36 of Form 1040. To split up your refund into multiple accounts, complete Form 8888 and indicate up to three accounts at a U.S. bank or other financial institution (e.g., a mutual fund, brokerage firm, or credit union). Ensure that the IRA deposit is noted for the prior year and that you are within the annual IRA contribution limits.
Coming Soon: Beginning in tax year 2027, the SECURE Act of 2022 replaces the Saver's Credit with the Saver's Match, a new matching contribution from the federal government for retirement savers meeting income and other eligibility requirements. The Saver's Match will be 50% of a worker's retirement plan or IRA contributions up to $2,000, representing a maximum amount of $1,000.
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