Katelyn Washington
Saving for retirement is even more rewarding if you qualify for the Retirement Savings Contribution Credit, better known as the Saver's Credit. This tax break is designed to encourage people with low and middle incomes to begin building their retirement nest eggs. For those who qualify for the Saver's Credit, the lower your income, the higher the percentage of retirement plan contributions you get back on your tax return.
Who qualifies for the Saver's Credit?
For the 2023 tax year, single filers and married people filing a separate return with modified adjusted gross income (MAGI) of $36,500 or less may be eligible. Married couples filing jointly must have a modified AGI of $73,000 or less, while head-of-household filers must have a modified AGI of $54,750 or less.
However, some people can't claim the Saver's Credit, regardless of income. Taxpayers under 18 years of age, full-time students, and anyone claimed as a dependent on someone else's tax return aren't eligible. You're considered a full-time student for purposes of the credit if, during any part of five months of the year, you:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
- Were enrolled as a full-time student at a school (including a technical, trade, or mechanical school); or
- Took a full-time on-farm training course offered by a school or a state, county, or local government agency.
How much is the Saver's Credit?
If your income falls within the credit limits, you can claim up to $1,000 for single filers or $2,000 for joint filers. The credit is based on 10%, 20%, or 50% of the first $2,000 ($4,000 for joint filers) you contribute to retirement accounts, including 401(k)s, traditional IRAs, and Roth IRAs (rollover contributions don't count).
The following table shows which percentage you would use for the 2023 tax year, depending on your income and filing status.
| Married Filing Jointly | Head-of-Household | Other Filing Statuses | Percentage of Contribution Allowed |
| AGI of $43,500 or less | AGI of $32,625 or less | AGI of $21,750 or less | 50% |
| AGI of $43,501 to $47,500 | AGI of $32,626 to $35,625 | AGI of $21,751 to $23,750 | 20% |
| AGI of $45,501 to $73,000 | AGI of $35,626 to $54,750 | AGI of $23,751 to $36,500 | 10% |
| AGI over $73,000 | AGI over $54,750 | AGI over $36,500 | 0% |
The Saver's Credit is a nonrefundable tax credit. That generally means the credit is only worth as much as the tax you owe.
In other words, the credit can't reduce your tax liability below $0 or generate a tax refund by itself. For example, if you owe $500 of tax before applying the credit, but you qualify for a $750 Saver's Credit, you won't owe any tax, but you won't be getting a refund for $250, either.
How to claim the Saver's Credit
To claim the Saver's Credit, you need to complete Form 8880 (Credit for Qualified Retirement Savings Contributions) to calculate the amount of your credit. You will then report the credit amount on your federal Form 1040. Make sure you attach Form 8880 when you file your return.
Related Content
-
Three Critical Tax Changes Could Boost Your Paycheck in 2026Tax Tips The IRS predicts these tax breaks may change take-home pay in 2026. Will you get over $1,000 in tax savings?
-
The Rubber Duck Rule of Retirement Tax PlanningRetirement Taxes How can you identify gaps and hidden assumptions in your tax plan for retirement? The solution may be stranger than you think.
-
RMDs, Roth, and SS: Test Your Knowledge of Retirement Tax RulesQuiz Don't let the IRS catch you off guard. Take our quiz to reveal common retirement tax rules that could save (or cost) you thousands.
-
What’s the New 2026 Estate Tax Exemption Amount?Estate Tax The IRS just increased the exemption as we enter into a promising tax year for estates and inheritances.
-
IRS Updates 2026 Tax Deduction for People Age 65 and OlderTax Changes Adjustments to the extra standard deduction can impact the tax bills of millions of older adults. Here are some new amounts to know for 2026.
-
IRS Reveals New 2026 Child Tax Credit and other Family Credit AmountsTax Credits Key family tax breaks are higher for 2026, including the Earned Income Tax Credit and the Adoption Credit. Here's what they're worth.
-
Standard Deduction 2026 Amounts Are HereTax Breaks What is the standard deduction for your filing status in 2026?
-
Claiming the Standard Deduction? Here Are Five Tax Breaks for Retirement in 2025Tax Tips If you’re retired and filing taxes, these five tax credits and deductions could provide thousands in relief (if you qualify).
