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 is a nonrefundable credit that 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’re:

• A legal adult: You must be at least 18 years of age.
• Not a 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 5 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 contribute 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 2024 and 2025 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 2024 tax year:

• $57,375 for the head of household
• $76,500 for married filing jointly
• $38,250 for all other filing statuses

And these are the limits for the 2025 tax year:

• $59,250 for the head of household
• $79,000 for married filing jointly
• $39,500 for all other filing statuses

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 have a direct impact on your saver’s tax credit amount. 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.

Here’s a breakdown of how much you could actually receive based on your filing status and AGI in 2024:

The Saver’s Credit income limits will increase slightly for 2025 income that will be reported on tax returns filed 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 2 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.

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