As the 2025 tax season approaches, the IRS has great news for eligible taxpayers: you could qualify for the Saver’s Credit, a tax benefit worth up to $2,000 for individuals (or $4,000 for married couples filing jointly) who contribute to retirement savings accounts. Here’s everything you need to know about this valuable tax credit, its requirements, and how to claim it.
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Table of Contents
What Is the Saver’s Credit?
The Saver’s Credit (also known as the Retirement Savings Contributions Credit) is a tax incentive designed to reward eligible taxpayers for contributing to their retirement savings accounts. It reduces your tax liability and could boost your tax refund.
To qualify, you must make contributions to one or more of the following:
- Employer-sponsored retirement plans (e.g., 401(k), 403(b), SIMPLE IRA, or governmental 457(b) plans).
- Traditional or Roth IRAs.
- ABLE accounts (if you are the designated beneficiary).
- Section 501(c)(18)(D) plans.
Keep in mind that rollover contributions do not qualify, and recent withdrawals from retirement or ABLE accounts may lower your eligible contribution amount.
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Saver’s Credit Eligibility Requirements
To claim the Saver’s Credit, you must meet the following criteria:
- Age Requirement: Be at least 18 years old.
- Filing Status: You cannot be claimed as a dependent on someone else’s tax return.
- Student Status: You cannot be a full-time student.
- Income Limits:
- Married filing jointly: Up to $76,500.
- Head of household: Up to $57,375.
- All other filing statuses: Up to $38,250.
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How Much Can You Earn with the Saver’s Credit?
The Saver’s Credit rate varies based on your adjusted gross income (AGI) and filing status. Here’s a breakdown for the 2024 tax year:
| Credit Rate | Married Filing Jointly | Head of Household | All Other Filers |
|---|---|---|---|
| 50% of Contribution | AGI ≤ $46,000 | AGI ≤ $34,500 | AGI ≤ $23,000 |
| 20% of Contribution | $46,001 – $50,000 | $34,501 – $37,500 | $23,001 – $25,000 |
| 10% of Contribution | $50,001 – $76,500 | $37,501 – $57,375 | $25,001 – $38,250 |
| 0% of Contribution | > $76,500 | > $57,375 | > $38,250 |
The maximum credit you can receive is $1,000 for individuals or $2,000 for married couples filing jointly.
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How to Claim the Saver’s Credit
To claim the Saver’s Credit, complete the following steps:
- Fill out Form 8880 (Credit for Qualified Retirement Savings Contributions).
- Attach Form 8880 to your Form 1040 tax return.
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Contribution Deadlines for Maximum Credit
To qualify for the Saver’s Credit for the 2024 tax year, make sure your contributions are completed by the following deadlines:
- IRA Contributions:
- Contribute by April 15, 2025, which is also the tax filing deadline.
- Applies to both Traditional and Roth IRAs.
- Employer-Sponsored Plans:
- Elective deferrals (e.g., 401(k), 403(b)) must be made by December 31, 2024.
Maximize Your Tax Benefits
The Saver’s Credit is a powerful tool to reduce your tax burden and incentivize saving for your future. Whether you’re contributing to a 401(k), an IRA, or an ABLE account, the credit provides a direct financial reward for building long-term wealth.
Don’t miss out on this opportunity—review your eligibility, contribute to your retirement accounts, and make sure to file Form 8880 with your tax return to secure the Saver’s Credit.
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