Can You Claim the Saver’s Credit? Eligibility, Benefits and How To Apply

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The Retirement Savings Credit, or Saver’s Credit, is a special tax break for low- and moderate-income taxpayers who actively contribute to an eligible retirement plan.

It’s a nonrefundable federal tax credit for eligible retirement contributions. The Saver’s Credit reduces the amount of taxes owed on a dollar-for-dollar basis. You can use it alongside other tax deductions and credits to lower your bill even further.

The maximum credit amount is $2,000 for those who are married and filing jointly and $1,000 for single filers.

Eligible Retirement Plans

You might qualify for this credit if you have a:

• Traditional IRA
• Roth IRA
• SIMPLE IRA
• 401(k)
• 403(b)
• 457 plan
• 501(c)(18)(D) plan
• SARSEP
• Other employer-sponsored or qualified retirement plans.

If you’re the designated beneficiary of an Achieving a Better Life Experience (ABLE) account, you may also qualify.

Who Qualifies for the Saver’s Credit?

You may be eligible for the saver’s tax credit if you meet all of the following requirements:

• A legal adult: You must be at least 18 years old.
• Not a student: You can’t be a full-time student. You’re considered a student if you enrolled in a school or on-farm training course at a school or local, county or state government agency on a full-time basis during any part of five calendar months of the tax year for which you’re claiming the credit. The IRS doesn’t consider those enrolled in on-the-job training courses as students.
• Not a dependent on someone else’s tax return: The IRS defines a dependent as someone, usually a qualifying child or relative, who relies on another person financially.
• A qualified surviving spouse filer: If you’re a qualifying surviving spouse filer, you may be eligible for the Saver’s Credit.
• Contributing to an eligible plan: You must contributed new money to an eligible retirement plan, like an IRA, to qualify. Note that rollover contributions won’t help you qualify for the credit. Recent distributions from an IRA, ABLE account or other retirement plan may also lower your eligible contributions.

What Are the 2025 and 2026 Income Limits?

You must also meet Adjusted Gross Income (AGI) thresholds to qualify for the Saver’s Credit. These are the AGI credit limits for the 2025 tax year — for taxes filed in 2026 — and 2026 tax year — for taxes filed in 2027:

2025 Saver’s Credit Limits

2026 Saver’s Credit Limits

If your AGI is too high, you won’t qualify for this tax break. That doesn’t mean you won’t qualify for other tax credits or deductions, so do your research to make sure you’re not missing out on any major savings.

How Much Can You Get From the Saver’s Credit?

Your income level and filing status directly affect how much you can claim from the Saver’s Credit. The IRS allows you to apply first $2,000 per person in eligible retirement contributions.

Because the maximum credit amount is 50%, the Saver’s Credit can be worth up to $1,000 for individuals — $2,000 x 50% — and $2,000 for married couples filing jointly– $4,000 x 50%.

Keep in Mind

If married and filing jointly, you can claim up to $2,000. If filing an individual tax return, the maximum credit is halved at $1,000.

Notably, the value of this credit is based on your eligible retirement account contributions. You could receive 10%, 20% or 50% of the maximum contribution amount, depending on your AGI and filing status. This means you could receive up to $200, $400 or $1,000 in the form of a tax credit.

How To Claim a Credit: An Example

Here’s how it works for a married couple filing jointly who want to claim a 10% credit. This couple earns $65,000 in 2026 and each contributed $2,500 to their 401(k) plan.

1. Determine the rate: Their income falls into the 10% tier because they make between $52,501 to $85,000.
2. Apply the cap: Even though they contributed $5,000, the IRS only counts $4,000 for a married couple.
3. Calculate the credit: You take the cap of $4,000 and multiply it with the tier rate (10%) and that equals $400.

This couple can reduce their total tax bill by $400 in 2026.

How To Claim the Saver’s Credit

To claim the Saver’s Credit, you’ll need to use Form 8880 (Credit for Qualified Retirement Savings Contributions) when filing taxes. This form will be attached to your Form 1040, 1040-SR or 1040-NR. Information you’ll need includes:

• Your eligible retirement account contributions.
• Your spouse’s eligible retirement account contributions, if applicable.
• Any distributions you or your spouse took for the past two years.

It’s also important to keep track of your retirement contributions throughout the year. If, for example, you have an employer-sponsored plan, you can monitor your account on your 401(k) provider’s online portal. You can also contact your employer.

Tips for Maximizing the Saver’s Credit

The Saver’s Credit can help you reduce the amount of taxes you owed. Those married, filing jointly can qualify for up to $2,000 in a Saver’s Credit, while individual filers can get up to $1,000. To qualify you must:

• Open an eligible retirement account and make contributions.
• Meet the income requirements.
• Be over 18 and not a dependent or a full-time student.

Changes to Saver’s Credit Coming in 2027

The Saver’s Credit, starting in 2027, will be replaced with the Saver’s Match. The government, if you’re eligible, will directly deposit money into your retirement account. It’s a flat 50% match for everyone who qualifies and the maximum benefit would be $1,000 for individuals and $2,000 for couples.

Rudri Bhatt Patel contributed to the reporting for this article.

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