Retirement Saver's Tax Credit Converted to "Saver's Match"

President Biden has signed legislation that turns the Saver's Credit into a government match to your retirement plan contributions.

eggs labeled Roth, IRA, and 401k in a bird's nest
(Image credit: Getty Images)

The Saver's Credit helps lower- and middle-income Americans who contribute to a retirement plan by cutting up to $1,000 ($2,000 for married couples) off their tax bill when they file their annual tax return. It's also a particularly good incentive to get young people started early on saving for their golden years. But the Saver's Credit as it exists today is in for some significant changes – particularly with respect to how it's paid. The SECURE 2.0 Act of 2022, which was signed into law by President Biden on December 29, converts the credit into a government matching program for retirement plan contributions dubbed the "Saver's Match."

The new Saver's Match isn't effective until 2027, so the existing tax credit will still be around for a few more years. But if you'll still be saving for retirement after 2026, the smart move is to become familiar with the new tax break now so you can hit the ground running in 2027.

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Rocky Mengle

Rocky Mengle was a Senior Tax Editor for Kiplinger from October 2018 to January 2023 with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, Rocky worked for Wolters Kluwer Tax & Accounting, and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. in History from Salisbury University.