Arielle O’Shea leads the investing and taxes team at NerdWallet. She has covered personal finance and investing for over 15 years, and was a senior writer and spokesperson at NerdWallet before becoming an assigning editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia.
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Uncle Sam wants you to save for retirement — so much so that he offers a tax credit for doing so.
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.
You’re eligible for the saver’s credit if you are 18 or older, not a full-time student and not claimed as a dependent on another person’s tax return [0]
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:
» Not eligible? An IRA has tax perks of its own.
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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: Tax credits versus tax deductions
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 [0]
The adjusted gross income thresholds below apply to income earned in 2023, which is reported on tax returns filed in 2024.
Married filing jointly
50% of contribution
20% of contribution
10% of contribution
AGI of $43,500 or below.
Head of household
50% of contribution
20% of contribution
10% of contribution
AGI of $32,625 or below.
50% of contribution
20% of contribution
10% of contribution
AGI of $21,750 or below.
The adjusted gross income thresholds below apply to income earned in 2024, which is reported on tax returns filed in 2025.
Married filing jointly
50% of contribution
20% of contribution
10% of contribution
AGI of $46,000 or below.
Head of household
50% of contribution
20% of contribution
10% of contribution
AGI of $34,500 or below.
50% of contribution
20% of contribution
10% of contribution
AGI of $23,000 or below.
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.
» Learn more about tax-advantaged retirement accounts: Traditional IRA vs. Roth IRA
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 [0]
U.S. Senate Finance Committee . SECURE 2.0 Act of 2022. Accessed Nov 14, 2023.Simple tax filing with a $50 flat fee for every scenario
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Learn MoreMarried filing jointly
50% of contribution
20% of contribution
10% of contribution
AGI of $39,000 or below
Head of household
50% of contribution
20% of contribution
10% of contribution
AGI of $29,250 or below
50% of contribution
20% of contribution
10% of contribution
AGI of $19,500 or below
2021 tax yearMarried filing jointly
50% of contribution
20% of contribution
10% of contribution
AGI of $39,500 or below
Head of household
50% of contribution
20% of contribution
10% of contribution
AGI of $29,625 or below
50% of contribution
20% of contribution
10% of contribution
AGI of $19,750 or below
2022 tax yearMarried filing jointly
50% of contribution
20% of contribution
10% of contribution
AGI of $41,000 or below.
Head of household
50% of contribution
20% of contribution
10% of contribution
AGI of $30,750 or below.
50% of contribution
20% of contribution
10% of contribution
AGI of $20,501 or below.
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Arielle is a NerdWallet authority on retirement and investing, with appearances on the "Today" Show, "NBC Nightly News" and other national media. See full bio.
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