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, and will apply to the first $2,000 in savings contributions.

The credit amount is based upon the individual's adjusted gross income (AGI). The chart below shows the adjusted gross income limitations for determining the Saver's Credit rate for taxpayers.

2024 Saver's Credit

2024 Saver's Credit
Credit RateMarried Filing JointlyHead Of HouseholdAll Other Filers*
50% of contributionAGI 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 contributionmore than $76,500more than $57,375more than $38,250
* Single, married filling separately, or qualifying widow(er)

2023 Saver's Credit

2023 Saver's Credit
Credit RateMarried Filing JointlyHead of HouseholdAll Other Filers *
50% of contributionAGI not more than $43,500 AGI not more than $32,625 AGI not more than $21,750 
20% of contribution$43,501 -  $47,500$32,626 - $35,625$21,751 - $23,751
10% of contribution$47,501 - $73,000$35,626 - $54,750$23,751 - $36,500
0% of contributionmore than $73,000more than $54,750more than $36,500
* 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.

More information from the IRS website