What Is the Saver’s Credit?
Maximize Your Retirement Savings with the Saver’s Credit
Saving for retirement is always a smart move—but did you know the IRS might reward you for doing it? If you're a low-to-moderate income earner, you could be eligible for the Saver’s Credit, also known as the Retirement Savings Contributions Credit. This valuable tax credit can reduce your tax bill just for contributing to your retirement accounts.
Let’s break down how it works, who qualifies, and how much you could benefit.
What Is the Saver’s Credit?
The Saver’s Credit is a non-refundable tax credit available to eligible taxpayers who contribute to qualified retirement plans such as:
Traditional or Roth IRAs
401(k), 403(b), 457(b), and Thrift Savings Plans
SIMPLE and SEP IRAs
The credit is worth 10%, 20%, or 50% of your contributions, depending on your adjusted gross income (AGI) and filing status. The maximum contribution amount eligible for the credit is $2,000 ($4,000 for married couples), so the maximum credit you can receive is $1,000 ($2,000 for married couples).
2024 Income Limits to Qualify
To qualify, your income must fall below these thresholds for the 2024 tax year:
Filing StatusAGI Limit to QualifySingle$36,500Head of Household$54,750Married Filing Jointly$73,000
You must also meet these additional criteria:
Be age 18 or older
Not be claimed as a dependent on someone else’s return
Not be a full-time student
Real-Life Example: Meet Sarah
Sarah is a 29-year-old marketing assistant who files her taxes as a single individual. In 2024, her adjusted gross income is $30,000. She contributes $1,200 to her Roth IRA throughout the year.
Based on her income level, she qualifies for a 20% Saver’s Credit. That means she can claim a $240 credit on her tax return (20% of $1,200). This directly reduces the amount she owes in taxes—it's not a deduction, but a true dollar-for-dollar reduction in tax liability.
Why It Matters
The Saver’s Credit is one of the few opportunities to get a tax break while also saving for your future. For those just starting out, or for anyone earning a modest income, it can be a great incentive to contribute to retirement accounts and make long-term financial planning a priority.
Let’s Talk
If you're not sure whether you qualify or want help maximizing your tax benefits, let’s connect. As tax professionals, we’re here to help you make the most of every credit and deduction available to you.
Looking for personalized advice on retirement contributions and tax planning? Contact our office today to schedule a consultation.