Introduction
The Saver’s Credit, also known as the Retirement Savings Contributions Credit, helps low-to-
moderate-income taxpayers save for retirement by offering a tax credit for contributions to eligible
retirement accounts. Under IRC § 25B, taxpayers can claim up to $1,000 ($2,000 for married
couples) in tax savings.
Many eligible taxpayers fail to claim this credit, missing out on valuable tax benefits. This guide
explains who qualifies, how much you can receive in 2025, and how to claim the credit correctly.
Who Qualifies for the Saver’s Credit?
To be eligible for the Saver’s Credit, you must meet the following criteria:
- Be age 18 or older
- Not be a full-time student (enrolled for at least five months in 2025)
- Not be claimed as a dependent on someone else’s tax return
- Meet income limits based on filing status
2025 Income Limits for the Saver’s Credit
| Filing Status | 50% Credit (Max Benefit) | 20% Credit | 10% Credit | No Credit |
|---|---|---|---|---|
| Single | Up to $22,000 | $22,001 – $24,000 | $24,001 – $36,500 | Above $36,500 |
| Married Filing Jointly | Up to $44,000 | $44,001 – $48,000 | $48,001 – $73,000 | Above $73,000 |
| Head of Household | Up to $33,000 | $33,001 – $36,000 | $36,001 – $54,750 | Above $54,750 |
Note: The lower your income, the higher your credit percentage.
How Much Is the Saver’s Credit Worth?
- The credit is 10%, 20%, or 50% of the first $2,000 ($4,000 for joint filers) contributed to a
retirement account. - The maximum credit is $1,000 per person ($2,000 for married filing jointly).
What Retirement Contributions Qualify for the Saver’s Credit?
Eligible Retirement Accounts
- Traditional & Roth IRAs (IRC § 408)
- 401(k), 403(b), 457(b), SIMPLE IRA, SEP IRA
- ABLE accounts (if eligible)
Contributions That DO NOT Qualify
- Employer matching contributions
- Rollover contributions
- Withdrawals or distributions
How to Claim the Saver’s Credit
Step 1: Make Retirement Contributions
- Contribute to a Traditional IRA, Roth IRA, or employer-sponsored retirement plan by April
15, 2026 (for the 2025 tax year).
Step 2: Complete IRS Forms
- Form 8880 – Credit for Qualified Retirement Savings Contributions
- Form 1040, Line 4 of Schedule 3 – Report the credit amount
Step 3: File Your Tax Return
- The credit is non-refundable, meaning it reduces your tax liability but won’t generate a
refund.
IRS Forms & Compliance Checklist
- Form 1040 – Main tax return
- Form 8880 – Required to claim the credit
- Form 5498 – IRA contributions (sent by plan provider)
Conclusion
The Saver’s Credit rewards low-to-moderate-income taxpayers who save for retirement by reducing
their tax liability. By contributing to a 401(k) or IRA, you can claim up to $1,000 ($2,000 for married
couples) in tax credits.
For expert tax assistance, schedule a consultation with Anshul Goyal, CPA EA FCA, a licensed tax
professional and IRS representative.
Frequently Asked Questions (FAQs)
1. Can I claim the Saver’s Credit if I take the standard deduction?
Yes, the credit is available whether you itemize or take the standard deduction.
2. Can I claim the Saver’s Credit if I have a Roth IRA?
Yes, both Traditional and Roth IRA contributions qualify.
3. Can I receive the Saver’s Credit as a refund?
No, the credit is non-refundable and can only reduce your tax liability.
4. Can I claim the Saver’s Credit if I withdraw money from my IRA?
If you take distributions, your eligible contributions may be reduced.
5. What if my spouse and I both contribute to retirement accounts?
Each spouse can claim the maximum $1,000 credit, for a total of $2,000.
About Our CPA
Anshul Goyal, CPA EA FCA is a licensed Certified Public Accountant and an IRS Enrolled Agent (EA).
He specializes in retirement tax planning, IRS compliance, and maximizing tax credits.
Schedule a consultation today with Anshul Goyal, CPA, to optimize your tax benefits.