The Saver’s Credit: How to Get a Tax Break for Retirement Savings
The Saver’s Credit rewards low- to moderate-income workers who contribute to retirement accounts like a 401(k) or IRA. Here’s how it works and how you can qualify.
How Much Is the Saver’s Credit Worth?
The credit is 10%–50% of your contributions, up to $2,000 ($4,000 for married couples).
| Income Level (2024) | Credit Percentage |
|---|---|
| Single: $0 – $23,000 | 50% |
| Single: $23,001 – $25,000 | 20% |
| Single: $25,001 – $36,500 | 10% |
| Married Filing Jointly: $0 – $46,000 | 50% |
| Married Filing Jointly: $46,001 – $50,000 | 20% |
| Married Filing Jointly: $50,001 – $73,000 | 10% |
🔗 Related: Your Guide to Tax Credits & Deductions
Who Qualifies for the Saver’s Credit?
To claim the credit, you must: ✅ Be 18 or older and not a full-time student.
✅ Not be claimed as a dependent on someone else’s return.
✅ Contribute to a 401(k), 403(b), IRA, or similar plan.
✅ Have income within the qualifying limits (see table above).
🔗 Related: Tax Credit vs. Deduction: What’s the Difference?
Which Retirement Accounts Qualify?
The Saver’s Credit applies to contributions made to:
- 401(k), 403(b), 457 plans
- Traditional & Roth IRAs
- SIMPLE & SEP IRAs
- Self-employed retirement accounts (Solo 401(k), Keogh plans)
🔗 Related: Earned Income Tax Credit (EITC) Explained
How to Claim the Saver’s Credit
✅ Report contributions on Form 8880 (Credit for Qualified Retirement Savings Contributions).
✅ File Form 1040 or Form 1040-SR (not available on 1040-EZ).
✅ Use IRS Free File or tax software to claim the credit.
🔗 Need filing help? Tax Filing Shortcuts
Final Thoughts
The Saver’s Credit is an often-overlooked tax benefit that can help workers save for retirement while lowering their tax bill.
🚀 Next Steps:
- Check if you qualify using the IRS Saver’s Credit Tool.
- Contribute to a retirement account before the deadline.
- File correctly to claim your credit and maximize savings.
🔗 Looking for more tax benefits? Visit our Tax Credit Guide.