Think you can't afford to save?
A nonrefundable tax credit known as the Saver's Credit may be available to low and middle-income savers who make contributions to eligible retirement savings plans, such as 403(b), 457(b), 401(k) and IRA plans. The credit is claimed on an IRS Form 8880 with the individual's income tax return. The maximum contribution amount that may qualify for the credit is $2,000 ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly).
The credit amount is based upon the individual's adjusted gross income (AGI).
2025 Saver's Credit
| Credit Rate | Married Filing Jointly | Head of Household | All Other Filers * |
|---|---|---|---|
| 50% of contribution | AGI not more than $47,500 | AGI not more than $35,625 | AGI not more than $23,750 |
| 20% of contribution | $47,501 - $51,000 | $35,626 - $38,250 | $23,751 - $25,500 |
| 10% of contribution | $51,001 - $79,000 | $38,251 - $59,250 | $25,501 - $39,500 |
| 0% of contribution | more than $79,000 | more than $59,250 | more than $39,500 |
| * Single, married filling separately, or qualifying widow(er) | |||
2024 Saver's Credit
| Credit Rate | Married Filing Jointly | Head Of Household | All Other Filers* |
|---|---|---|---|
| 50% of contribution | AGI not more than $46,000 | AGI not more than $34,500 | AGI not more than $23,000 |
| 20% of contribution | $46,001 - $50,000 | $34,501 - $37,500 | $23,001 - $25,000 |
| 10% of contribution | $50,001 - $76,500 | $37.501 - $57,375 | $25,001 -$38,250 |
| 0% of contribution | more than $76,500 | more than $57,375 | more than $38,250 |
| * Single, married filling separately, or qualifying widow(er) | |||
The contribution amount upon which the credit is based may be reduced by any distribution amounts made from any plans....
- in the tax year in which the tax credit is applied
- in the 2 tax years preceding the year in which the tax credit is applied; or
- in the period after the tax year the tax credit is applied and before the individual's tax filing deadline for that year.
As under current law, contributions to eligible retirement savings plans will continue to be excludable from income. Please contact a tax professional for more information about this benefit.