Retirement Saver's Tax Credit

bennett zamani Updated on Dec 10, 2025

What the Saver’s Credit looks like right now (2025/2026 filings)

The Retirement Savings Contributions Credit (Saver’s Credit) still exists today and largely works the same way it has:

It’s a nonrefundable tax credit for low- to moderate-income taxpayers who contribute to:

- Traditional or Roth IRAs

- 401(k), 403(b), 457(b), SIMPLE, SARSEP, and some other employer plans

- Certain 403(b)/qualified plans and ABLE accounts

The credit rate is 50%, 20%, or 10% of your qualifying contributions, up to:

$2,000 per person
$4,000 if married filing jointly

So the maximum credit is:

$1,000 per person
$2,000 if married filing jointly

Income limits (example: 2024)

For 2024, the AGI thresholds were increased (they adjust annually for inflation). For the 2024 tax year, the credit rate by AGI looked like this: ([IRS][1])

Married filing jointly

* 50% credit: AGI up to $46,000

* 20% credit: $46,001–$50,000

* 10% credit: $50,001–$76,500

* 0%: above $76,500

Head of household

* 50%: up to $34,500

* 20%: $34,501–$37,500

* 10%: $37,501–$57,375

* 0%: above $57,375

Single / MFS / qualifying widow(er)

* 50%: up to $23,000

* 20%: $23,001–$25,000

* 10%: $25,001–$38,250

* 0%: above $38,250

The IRS updates these AGI bands every year for inflation, so for the year you are filing, you always want the latest IRS chart (Form 8880 instructions or the IRS Saver’s Credit page).

2. Big change coming: Saver’s Credit will become the Saver’s Match (starting 2027)

Under the SECURE 2.0 Act of 2022, the current Saver’s Credit is scheduled to be largely replaced by a new system called the Saver’s Match for tax years after December 31, 2026 (i.e., beginning with 2027).

What’s changing in 2027? Instead of a tax credit on your return, eligible savers will receive a federal matching contribution directly into their retirement account (or IRA). The federal government will match 50% of your contributions, up to $2,000 of contributions per person. That means up to a $1,000 federal match per year per eligible person, deposited into the account. This match will be “refundable” in effect, because it is not limited by the amount of tax you owe; the money goes into your retirement account instead of reducing your tax bill.

Other key differences vs. today’s Saver’s Credit:

* Income limits and phase-outs will still apply, but will be based on a modified AGI calculation that doesn’t give the same benefit from deducting retirement contributions for purposes of qualifying.

* The program is intended to reach more low-income savers, including those who currently get little or no benefit because they have very low tax liability.

In short:

* Now through 2026: you get a nonrefundable tax credit on your return.

* Starting 2027: you get a federal match paid into your account (Saver’s Match), assuming Congress doesn’t change the law again before then.

3. Practical takeaways for you

1. For current planning (2024–2026 filings):

* Saver’s Credit still works the “old” way.

* Check the current-year AGI limits and contribution caps when you file (Form 8880).

2. For long-term planning (2027 and beyond):

* Expect the tax-return credit to go away and be replaced with a federal match deposited into your retirement plan or IRA.

* If you work with clients, this becomes a big education point: “Contribute and the government may add up to $1,000 a year for you.”

3. Strategy-wise:

The incentive to contribute to retirement accounts for lower-income savers does not disappear; it just changes form. Folks who previously didn’t benefit because they owed little or no income tax may benefit more under the Saver’s Match, since the match is not capped by tax liability.