Retirement Savings Contributions Credit

Low- and moderate-income taxpayers who contribute to an IRA or other qualified retirement plan may receive a tax credit. The amount of the credit is based on the taxpayer’s income level and the amount contributed. The maximum credit is $1,000 per person ($2,000 for married filing jointly). This credit was made permanent by the Pension Protection Act of 2006.

Note: 2026 is the last year for the Saver’s Credit in its current form. Beginning with tax year 2027, SECURE Act 2.0 replaces it with a Saver’s Match — a federal matching contribution of 50% on up to $2,000 in retirement savings (max $1,000 per person), deposited directly into the individual’s retirement account. Unlike the current non-refundable credit, the Saver’s Match benefits those with little or no tax liability.
Eligible Contributions

The credit applies to the first $2,000 per person in net contributions made to any of the following:

  • Contributions to traditional IRAs and Roth IRAs
  • Salary reduction contributions to a SARSEP-IRA, SIMPLE IRA, 401(k), SIMPLE 401(k), government 457 plan, or 403(b) annuity
  • Voluntary after-tax contributions to qualified retirement plans or 403(b) annuities (voluntary means contributions are not required as a term of employment)

To calculate net contributions: add all contributions made to eligible plans, then subtract any distributions taken from these plans during the tax year, in either of the past two tax years, or at any time between the end of the tax year and the filing date (including extensions). The maximum net contributions for credit purposes are capped at $2,000 per person.

2026 Credit Rates by AGI

The credit rate is determined by the taxpayer’s adjusted gross income (AGI) and filing status. Note that the rate drops in cliffs — crossing a threshold by even $1 drops the entire credit to the lower rate.

Credit Rate Filing Status 2026 AGI Range Maximum Credit
50% Single / MFS / Qualifying Surviving Spouse $24,250 or less $1,000 / person
$2,000 MFJ
50% Head of Household $36,375 or less
50% Married Filing Jointly $48,500 or less
20% Single / MFS / Qualifying Surviving Spouse $24,251 – $26,500 $400 / person
$800 MFJ
20% Head of Household $36,376 – $39,750
20% Married Filing Jointly $48,501 – $53,000
10% Single / MFS / Qualifying Surviving Spouse $26,501 – $40,250 $200 / person
$400 MFJ
10% Head of Household $39,751 – $60,375
10% Married Filing Jointly $53,001 – $80,500
0% Single / MFS / Qualifying Surviving Spouse More than $40,250 No credit
0% Head of Household More than $60,375
0% Married Filing Jointly More than $80,500

The credit equals the applicable rate multiplied by net contributions (capped at $2,000 per person). The maximum credit is therefore $1,000 per person (50% × $2,000). The credit is nonrefundable — it will not reduce the taxpayer’s tax liability below zero. It is claimed on Form 8880.

Who Is NOT Eligible

The Saver’s Credit is not available to:

  • Taxpayers under age 18
  • Full-time students (those attending class in 5 or more calendar months during the year)
  • Those claimed as dependents on another taxpayer’s return
Looking Ahead — Saver’s Match (2027): Beginning with tax year 2027, SECURE Act 2.0 replaces the Saver’s Credit with a Saver’s Match. Instead of a nonrefundable tax credit, eligible savers will receive a federal matching contribution of 50% on up to $2,000 in retirement savings (max $1,000 per person), deposited directly into the saver’s retirement account. The income thresholds for the Saver’s Match will be lower than the current credit, but the benefit will be accessible even to those with no tax liability — a significant improvement for the lowest-income savers. For 2026 taxes, the current nonrefundable credit structure still applies.
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