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Saver's Credit: What you need to know

Key takeaways

  • The Saver's Credit rewards those with low and moderate incomes for saving for retirement.
  • Credit size varies based on income and retirement account contribution amount.

Saving for retirement can be its own reward. But some retirement savers may get an extra incentive. A special part of the tax code known as the Retirement Savings Contributions Credit, or the Saver's Credit for short, provides a tax credit up to $2,000 to certain taxpayers saving for retirement.

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What is the Saver's Credit?

The Saver's Credit is a tax credit that low- and moderate-income individuals may claim for qualified contributions to eligible retirement accounts. It is a nonrefundable credit, meaning it can only reduce taxes, even to a point where taxes may be reduced to $0. You may still receive a tax refund if you had taxes withheld greater than your tax liability at year end, but the Saver's Credit itself cannot provide a refund.

The exact size of the Saver's Credit depends on how much you contribute and your income level, as represented by your adjusted gross income (AGI) and filing status. AGI is your gross income (aka anything you earn from work, investments, or interest) minus adjustments the IRS allows that decrease your taxable gross income. Think: what you pay in student loan interest or contribute to retirement accounts, if eligible.

Depending on your AGI, you could receive a tax credit of 10%, 20%, or 50% of the first $2,000 ($4,000 for joint filers) that you contribute to eligible retirement accounts.

2023 Saver's Credit eligibility

Saver's Credit rate Married filing jointly Head of household Single filers1
50% of eligible contributions AGI of no more than $43,500 AGI of no more than $32,625 AGI of no more than $21,750
20% of eligible contributions $43,501 - $47,500 $32,626 - $35,625 $21,751 - $23,750
10% of eligible contributions $47,501 - $73,000 $35,626 - $54,750 $23,751 - $36,500
0% of eligible contributions More than $73,000 More than $54,750 More than $36,500

Source: "Retirement Savings Contribution Credit (Saver's Credit)," AGI is an abbreviation for adjusted gross income.

2024 Saver's Credit eligibility

Saver's Credit rate Married filing jointly Head of household Single filers2
50% of eligible contributions AGI of no more than $46,000 AGI of no more than $34,500 AGI of no more than $23,000
20% of eligible contributions $46,001 - $50,000 $34,501 - $37,500 $23,001 - $25,000
10% of eligible contributions $50,001 - $76,500 $37,501 - $57,375 $25,001 - $38,250
0% of eligible contributions More than $76,500 More than $57,375 More than $38,250

Source: "401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000," AGI is an abbreviation for adjusted gross income.

How much do you have to contribute to get the Saver's Credit?

There is no minimum contribution amount to be eligible for the Saver's Credit. So even saving just a small amount in eligible retirement accounts could result in tax savings.

There is, however, a maximum contribution amount that you can count toward the Saver's Credit: $2,000 for single filers and $4,000 for joint filers. That works out to a nonrefundable tax credit of $1,000 for single filers and $2,000 for those filing jointly who can apply 50% of their contributions.3 Those who can apply 20% may see a nondeductible credit of up to $400 ($800 for joint), and those who can apply 10% may get a credit of up to $200 ($400 for joint).

Who can claim the Saver's Credit?

To be eligible to claim the Saver's Credit on your tax return, you must qualify by your AGI as detailed above as well as meet the following conditions:

  • You must be 18 or older.
  • You must not be claimed as a dependent on another person's tax return.
  • You must not be a student, meaning you haven't taken classes full time or on-farm training courses full time for any part of 5 calendar months of the tax year.

You also must contribute to eligible tax-advantaged retirement accounts, including traditional and Roth individual retirement accounts (IRAs), 401(k)s, 403(b)s, 457(b)s, SARSEP and SIMPLE plans, federal Thrift Savings Plans, 501(c)(18)(D) plans, and ABLE accounts for which you are the beneficiary.

How to claim the Saver's Credit

To claim the Saver's Credit, make sure to contribute to an eligible retirement account by the contribution deadline for the tax year. Those saving in a workplace plan like a 401(k) usually have until the end of the calendar year. Retirement savers using IRAs, meanwhile, can make eligible contributions for the Saver's Credit in the prior tax year until the annual tax filing deadline. Typically, this is April 15 of the following year.

You can then calculate and claim the amount of the Saver's Credit you are eligible for by completing Form 8880, "Credit for Qualified Retirement Savings Contributions," when you file your tax return. If you're not sure whether you qualify or how to complete this form, check with a tax professional.

If your income doesn't allow you to claim the Saver's Credit at this time, you're still entitled to the tax benefits that you qualify for that are provided by eligible retirement accounts.

What to do with the Saver's Credit?

If received, the credit will be a part of your tax return. You can use those additional funds to make a contribution to a retirement account in the current year to get you part way to receiving the Saver's Credit again the subsequent year, subject to updated AGI limits. Beginning in 2027, the SECURE Act 2.0 provision will transform this credit into a direct contribution into the eligible account where contributions were made to receive the credit.

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1,2. Single filers, those who are married but file separately, and qualifying widow(er)s all receive the same treatment for the Saver's Credit. 3. As long as 2023 AGI does not exceed $43,500 for married taxpayers filing jointly and $21,750 for taxpayers who file as single.

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Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

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