What Is the Savers Credit?

Updated for Tax Year 2022 • December 2, 2022 02:10 PM


The Savers Credit gives a special tax break to low- and moderate-income taxpayers who are saving for retirement.


Saving for retirement

The Retirement Savings Contributions Credit, also know as the Savers Credit, gives a special tax break to low- and moderate-income taxpayers who are saving for retirement. This credit is in addition to the other tax benefits for saving in a retirement account. If you qualify, a Savers Credit can reduce or even eliminate your tax bill.

Unfortunately, many eligible taxpayers don't take advantage of this break because they don't know about it. Indeed, a recent survey* shows that only 12% of American workers with annual household incomes of less than $50,000 are aware of the Savers Credit.

How much could the Savers Credit cut from my tax bill?

Depending on your adjusted gross income and tax filing status, you can claim the credit for 50%, 20% or 10% of the first $2,000 you contribute during the year to a retirement account. Therefore, the maximum credit amounts that can be claimed are $1,000, $400 or $200.

  • The biggest credit amount a married couple filing jointly can claim together is $2,000.
  • But, if you and/or your spouse took a taxable distribution from your retirement account during the two years prior to the due date for filing your return (including extensions), that distribution reduces the size of the Savers Credit available to you.
  • The Savers Credit is a 'non-refundable' tax credit. That means this credit can reduce the tax you owe to zero, but it can't provide you with a tax refund.

Which retirement accounts qualify for the credit?

The Savers Credit can be claimed for your contributions to a:

  • 401k,
  • 403(b),
  • 457 plan,
  • Simple IRA, or
  • SEP IRA.

You can’t claim your employer's contributions to these accounts, however. Your contributions to a traditional IRA or a Roth IRA are also eligible for the Savers Credit.

Am I eligible?

To claim a Savers Credit, you must:

  • Be age 18 or older.
  • Not be a full-time student.
  • Not be claimed as a dependent on someone else's tax return.
  • Have made your retirement contribution during the tax year for which you are filing your return.
  • Meet the income requirements.

In 2022, the maximum adjusted gross income for Savers Credit eligibility is:

  • $68,000 for a married couple filing jointly,
  • $51,00 for a head of household, and
  • $34,000 for all other taxpayers.

The maximum credit you can claim phases out as your income increases.

2022 Adjusted Gross Income:

Credit Single Filer               Head of Household         Joint Filers
50% $20,500 or less $30,750 or less $41,000 or less
20% $20,501-$22,000 $30,751-$33,000 $41,001-$44,000
10% $22,001-$34,000 $33,001-$51,000 $44,001-$68,000


John and Maria are married and file jointly. He’ll contribute $1,000 to his 401(k) plan this year. She’ll contribute $1,000 to an IRA. Their 2022 combined adjusted gross income is $33,500. Each of them is therefore eligible to claim a 50% credit for their contributions. Together, their credits are worth $1,000 (50% of $1,000 x 2 = $1,000).

Christine files as a head of household. She’ll contribute $1,200 to her 403(b) plan this year. With a 2022 adjusted gross income is $31,000, Christine can claim a 20% Savers Credit for her contribution, worth $240.

How do I claim the Savers Credit?

To claim the credit, use Form 8880, "Credit for Qualified Retirement Savings Contributions."

Heads-up: For tax years prior to 2018, you can only claim the Savers Credit if you use form 1040A, 1040 or 1040NR to file your federal tax return. Although the IRS has included information about the Savers Credit in the instructions for Form 1040EZ, those instructions direct you to a different form. You can't claim it on Form 1040EZ.

  • Beginning in 2018, forms 1040EZ and 1040A are no longer used. They have been replaced with new 1040 and 1040-SR forms.
  • For those who are filing prior year returns, you can continue to use these forms for tax years through 2017.

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*Transamerica Center for Retirement Studies, 11th Annual Survey, conducted online within the United States by Harris Interactive on behalf of Transamerica Center for Retirement Studies between December 3, 2009, and January 18, 2010, among 3,598 full-time and part-time workers.

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