Miranda is an award-winning freelancer who has covered various financial markets and topics since 2006. In addition to writing about personal finance, investing, college planning, student loans, insurance, and other money-related topics, Miranda is an avid podcaster and co-hosts the Money Talks News podcast.
David Schepp is a veteran financial journalist with more than two decades of experience in financial news editing and reporting for print, digital, and multimedia publications.
The saverâs credit is a federal tax credit for eligible taxpayers who contribute to a qualifiedretirement account, reducing their federal income tax bill.
How does the saverâs credit work?
Your tax credit is based on your adjusted gross income, filing status, and contributions to qualified plans, allowing you to claim 10%, 20%, or 50% of contributions, up to $1,000 for single filers or $2,000 for joint filers.
What changes are coming to the saverâs credit in 2027?
In 2027, the saverâs credit is scheduled to be replaced by the saverâs match under the SECURE 2.0 Act. Instead of reducing your federal income tax bill, the new program will provide a federal matching contribution deposited into an eligible retirement account for qualifying savers. As of mid-2026, implementation guidance is still being developed.
Open full sized image
Eligible? Capture the credit by contributing and claiming.
Saving for retirement can feel difficult if your paycheck is already stretched thin. The saverâs credit can help. It rewards eligible low- and moderate-income workers who contribute to a qualified retirement account by reducing the federal income tax they owe.
Unlike a deduction, which lowers your taxable income, a tax credit directly reduces your tax bill. Depending on your income and filing status, the saverâs credit can be worth $1,000 for individuals or $2,000 for joint filers. Beginning in 2027, the saverâs credit is scheduled to be replaced by the saverâs match, which provides a federal matching contribution to eligible retirement accounts.
Key Points
The saverâs credit can reduce your federal income tax bill by up to $1,000 for single filers and $2,000 for joint filers.
Contributions to traditional and Roth IRAs, 401(k)s, 403(b)s, SEP IRAs, and other qualified retirement plans may help you qualify for the saverâs credit.
The credit will be replaced by the saverâs match beginning in 2027.
What is the saverâs credit?
Often referred to simply as the saverâs credit, the Retirement Savings Contributions Credit is a federal tax credit available to eligible taxpayers who contribute money to a qualified retirement account.
Because itâs a nonrefundable tax credit, the saverâs credit can reduce your federal income tax bill to zero, but it wonât generate a refund if you donât owe any federal income tax.
Tax deduction vs. tax credit
A tax deduction reduces your taxable income. A tax credit directly reduces your tax bill, dollar for dollar. Think of a tax credit as a gift card applied to your tax bill.
How the saverâs credit works
Your tax credit is calculated based on your adjusted gross income, filing status, and how much you contributed to qualified plans. You can claim 10%, 20%, or 50% of what you contributedâup to $1,000 for single filers or $2,000 for joint filers. For the 2026 tax year, a taxpayer with $37,000 in adjusted gross income would qualify for different credit percentages depending on their filing status:
50% as a joint filer
20% as head of household
10% as a single filer (or married filing separately)
Letâs say youâre married filing jointly and contribute $2,000 to an individual retirement account (IRA) during the year. If you qualify for a 20% saverâs credit, your credit is $400 ($2,000 Ă 20%). If your tax bill ends up being $1,000, the credit reduces it to $600.
If youâre eligible, you may be able to claim the saverâs credit in addition to the usual tax benefits of your retirement account.
Who qualifies for the saverâs credit?
To qualify for the saverâs credit, you must:
Be at least 18 years old
Not be claimed as a dependent on someone elseâs tax return
Not be a full-time student during the tax year
Make eligible retirement contributions
Have an adjusted gross income below the limit for the credit
Eligible contributions include those made to a traditional or Roth IRA, traditional or Roth 401(k), 403(b), governmental 457(b), SIMPLE IRA, SEP IRA, Thrift Savings Plan, or other qualified employer plan.
Saverâs credit income limits
To qualify for the saverâs credit, you must not exceed certain income limits. The income limits for 2026 are:
Claiming the saverâs credit requires an extra step when filing your taxes: completing Form 8880. The form walks you through your eligible contributions and determine your applicable credit percentage to calculate your credit amount.
To claim the saverâs credit, complete IRS Form 8880 and include it with your federal income tax return. Most tax preparation software and tax professionals can determine your eligibility and calculate the credit for you.
Building a comfortable retirement typically involves combining Social Security with other sources of income.
EncyclopĂŠdia Britannica, Inc.
Why some taxpayers miss the saverâs credit
They assume Roth IRA contributions donât count. But Roth IRA contributions qualify for the saverâs credit even though theyâre made with after-tax dollars. If you otherwise qualify, you can claim the credit even if you donât contribute to another retirement account.
They forget to complete Form 8880. The saverâs credit isnât automatic. You must complete and file Form 8880 with your federal tax return.
They exceed the income limits. When you exceed the income limit for your filing status, you wonât qualify for the saverâs credit. But you can still benefit from contributing to a qualified retirement account.
They have little or no tax liability. Because the saverâs credit is nonrefundable, it can reduce your federal income tax bill to only zero. For example, if youâre eligible for a $500 credit but owe $100 in taxes, the credit eliminates your tax bill, but you wonât receive the remaining $400 as a refund.
The saverâs match: Whatâs changing in 2027
Under the SECURE 2.0 Act, enacted in 2022, the saverâs credit becomes the saverâs match in 2027. Instead of reducing your federal income tax bill, the new program provides a federal matching contribution that is deposited into an eligible retirement account if you qualify. As of mid-2026, federal agencies are still developing guidance on how the saverâs match will be administered. Like other retirement account contributions, the federal matching contribution can remain invested and potentially grow over time.
The bottom line
If youâre eligible, the saverâs credit can make saving for retirement more affordable by reducing your federal income tax bill. And because the credit is scheduled to become the saverâs match in 2027, 2026 may be the last year to claim it in its current form. Before you file your return, check whether your retirement contributions make you eligible for the saverâs credit.
