Who Can Claim the Saver’s Credit
The credit’s official name is the Retirement Savings Contributions Credit. You can claim it if all of these apply to you:
- You’re 18 or older.
- No one else claims you as a dependent on their tax return.
- You aren’t a student.
- Your income falls within the limits shown below.
For this credit, you count as a student if you were enrolled full-time at a school, or in a full-time on-farm training course, during any part of 5 calendar months of the year.
Which Contributions Count Toward the Credit
Once you know you’re eligible, the next step is checking which savings qualify. These contributions count:
- Traditional or Roth IRA contributions
- Elective deferrals to a 401(k), 403(b), governmental 457(b), SARSEP or SIMPLE plan
- Voluntary after-tax employee contributions to a qualified plan (including the Thrift Savings Plan) or a 403(b)
- Contributions to a 501(c)(18)(D) plan
- Contributions to an ABLE account where you’re the designated beneficiary
Rollovers from one account to another don’t qualify. Your eligible contributions may also be reduced if you recently took distributions from a retirement plan, IRA or ABLE account.
How Much the Saver’s Credit Is Worth
Your credit rate depends on your AGI and filing status. The lower your AGI, the higher your rate.
What AGI Means
AGI stands for adjusted gross income. It’s your total income minus certain adjustments, and you’ll find it on your Form 1040, the main federal income tax return.
2026 Income Limits by Filing Status
These AGI limits apply to the 2026 tax year, per IRS Notice 2025-67. The IRS raised the income ranges from the prior year.
| Credit rate | Married filing jointly | Head of household | All other filers* |
|---|---|---|---|
| 50% | $48,500 or less | $36,375 or less | $24,250 or less |
| 20% | $48,501–$52,500 | $36,376–$39,375 | $24,251–$26,250 |
| 10% | $52,501–$80,500 | $39,376–$60,375 | $26,251–$40,250 |
| No credit | Over $80,500 | Over $60,375 | Over $40,250 |
*Single, married filing separately and qualifying surviving spouse.
Two Examples for a Single Filer
Say you’re single, your AGI is $23,000, and you put $2,000 into an IRA. You qualify for the 50% rate, so your credit is $1,000.
Now say your AGI is $30,000 instead. You fall in the 10% tier, so the same $2,000 contribution earns a $200 credit.
Why It Matters That the Credit Is Nonrefundable
In both examples, the credit you actually get can’t exceed your federal tax liability (the tax figured on your return, before payments like withholding). That’s because the Saver’s Credit is nonrefundable. A nonrefundable credit can lower your tax bill to zero, but it doesn’t by itself create a refund.
For instance, suppose you owe $150 in federal income tax and earn a $200 credit. That credit reduces your tax balance to zero, but the remaining $50 is forfeited rather than refunded. Conversely, if your calculated tax comes to $1,000 with $1,000 already withheld by your employer, applying that same $200 credit decreases your total tax owed to $800, yielding a $200 tax refund.
How to Claim the Credit on Form 8880
You claim the credit by filing Form 8880 with your Form 1040. The form uses your contributions and AGI to figure your credit. Filling it out goes faster once you know how Form 8880 works.
The Saver’s Match Replaces the Credit in 2027
The credit is changing soon. Starting with the 2027 tax year, the SECURE 2.0 Act replaces it with the Saver’s Match for most contributions. Instead of reducing your tax bill, the federal government will deposit a matching contribution into your retirement account. The credit stays available for ABLE account contributions.
How the Saver’s Match differs from the credit:
- It’s a match, not a tax credit. The government contributes up to 50% of up to $2,000 of your qualifying contributions.
- You don’t need to owe income tax. The Saver’s Credit can’t exceed your tax liability, so it offers little to people who owe little or no income tax. The Saver’s Match is paid even if you have no income tax liability.
- A small match can be taken as a refundable credit. If your match would be less than $100 for the year, you can choose to receive it as a refundable tax credit instead of a deposit into your retirement account.
- The income limits are different. The Match uses modified adjusted gross income (MAGI) and phases out gradually. The limits adjust for inflation after 2027.
Sources
- IRS, Retirement Savings Contributions Credit (Saver’s Credit)
- IRS, About Form 8880
- IRS, Notice 2025-67
- IRS, 401(k) limit increases to $24,500 for 2026
- Congressional Research Service, The Retirement Savings Contribution Credit and the Saver’s Match
- IRS, Report to Congress on Anticipated Saver’s Match Promotion Efforts
