Saver's Credit: What It Is & How It Works in 2023-2024 - NerdWallet (2024)

Uncle Sam wants you to save for retirement — so much so that he offers a tax credit for doing so.

What is the saver’s credit?

The retirement savings contribution credit — the "saver’s credit" for short — is a nonrefundable tax credit worth up to $1,000 ($2,000 if married filing jointly) for mid- and low-income taxpayers who contribute to a retirement account.

Who can claim the saver’s credit?

But that doesn’t necessarily mean you get it: You must also make a retirement plan or IRA account contribution, and fall under maximum adjusted gross income caps the IRS sets each year.

If your adjusted gross income is above any of these thresholds, you aren't eligible for the saver’s credit:

2023 saver's credit limits (taxes filed in 2024)

2024 saver's credit limits (taxes filed in 2025)

» Not eligible? An IRA has tax perks of its own.

What the saver’s credit is worth

The saver's credit is worth up to $1,000 ($2,000 if married filing jointly). Keep in mind that a credit is not the same as a tax deduction — it’s better: While a tax deduction just reduces the amount of your income that is subject to taxes, a tax credit reduces your actual tax bill dollar-for-dollar.

» Learn more:

The value of the saver’s credit is calculated based on your contributions to a traditional or Roth IRA, 401(k), SIMPLE IRA, ABLE account, SARSEP, 403(b) or 457(b) plan. You may be eligible for 50%, 20% or 10% of the maximum contribution amount, depending on your filing status and adjusted gross income.

To qualify for the saver’s credit, the contribution must be new money; in other words, rollovers from an existing account — like a 401(k) rollover into an IRA — don't count.

Saver’s credit rates for 2023

The adjusted gross income thresholds below apply to income earned in 2023, which is reported on tax returns filed in 2024.

Saver’s credit rates for 2024

The adjusted gross income thresholds below apply to income earned in 2024, which is reported on tax returns filed in 2025.

Calculating the value of the saver's credit

Unlike many IRS rules, the math here is fairly simple: The credit is worth 50%, 20% or 10% of a maximum contribution of $2,000 (or a total of $4,000 if you're married filing jointly).

Let’s say you earn $19,000 as a single filer, and you contribute $1,000 to an eligible account. The value of your saver’s credit would be $500. If you managed to contribute $5,000 to an eligible account, your credit would be worth $1,000, due to the cap.

If your contribution was made to a traditional IRA, 401(k) or other account that offers a tax deduction for contributions, your taxable income would also be reduced by the amount of your contribution.

Secure 2.0 changes: Saver's match

Beginning in 2027, the saver's credit will be replaced with the "saver's match," a new program that does away with the tax credit in exchange for a matching federal retirement plan contribution. Under the new rules, people who contribute to a workplace retirement plan or IRA can receive a match of 50% (up to $2,000) to be directly deposited into their retirement plan.

To be eligible for this benefit, taxpayers must make $71,000 or below (married filing jointly), $53,250 or below (head of household), and $35,000 or below (single and married filing separately). However, be aware that there are phase-outs leading up to those thresholds that will reduce the total value of the matching contribution. The higher your income is, the lower the value of your allowed matching contribution will be.

Looking for past years' saver's credit thresholds?