Tax Credit Crush Tuesday: Retirement Savings Contributions Credit (Saver's Credit)
Retirement Savings Contributions Credit (Saver’s Credit)
You may be able to take a tax credit for making eligible contributions to your IRA or employer-sponsored retirement plan.
Who's eligible for the credit?
You're eligible for the credit if you're:
- Age 18 or older;
- Not a full-time student; and
- Not claimed as a dependent on another person’s return.
See the instructions for Form 8880, Credit for Qualified Retirement Savings Contributions, for the definition of a full-time student.
Amount of the credit
The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA contributions up to $2,000 ($4,000 if married filing jointly), depending on your adjusted gross income (reported on your Form 1040 or 1040A). Use the chart below to calculate your credit.
*Single, married filing separately, or qualifying widow(er)
| 2017 Saver's Credit | |||
|---|---|---|---|
| Credit Rate | Married Filing Jointly | Head of Household | All Other Filers* |
| 50% of your contribution | AGI not more than $37,000 | AGI not more than $27,750 | AGI not more than $18,500 |
| 20% of your contribution | $37,001 - $40,000 | $27,751 - $30,000 | $18,501 - $20,000 |
| 10% of your contribution | $40,001 - $62,000 | $30,001 - $46,500 | $20,001 - $31,000 |
| 0% of your contribution | more than $62,000 | more than $46,500 | more than $31,000 |
| 2016 Saver's Credit | |||
|---|---|---|---|
| Credit Rate | Married Filing Jointly | Head of Household | All Other Filers* |
| 50% of your contribution | AGI not more than $37,000 | AGI not more than $27,750 | AGI not more than $18,500 |
| 20% of your contribution | $37,001 - $40,000 | $27,751 - $30,000 | $18,501 - $20,000 |
| 10% of your contribution | $40,001 - $61,500 | $30,001 - $46,125 | $20,001 - $30,750 |
| 0% of your contribution | more than $61,500 | more than $46,125 | more than $30,750 |
| 2015 Saver's Credit | |||
|---|---|---|---|
| Credit Rate | Married Filing Jointly | Head of Household | All Other Filers* |
| 50% of your contribution | AGI not more than $36,500 | AGI not more than $27,375 | AGI not more than $18,250 |
| 20% of your contribution | $36,501 - $39,500 | $27,376 - $29,625 | $18,251 - $19,750 |
| 10% of your contribution | $39,501 - $61,000 | $29,626 - $45,750 | $19,751 - $30,500 |
| 0% of your contribution | more than $61,000 | more than $45,750 | more than $30,500 |
Retirement savings eligible for the credit
The Saver’s Credit can be taken for your contributions to a traditional or Roth IRA; your 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans.
Rollover contributions (money that you moved from another retirement plan or IRA) aren’t eligible for the Saver’s Credit. Also, your eligible contributions may be reduced by any recent distributions you received from a retirement plan or IRA.
Example: Jill, who works at a retail store, is married and earned $37,000 in 2016. Jill’s husband was unemployed in 2016 and didn’t have any earnings. Jill contributed $1,000 to her IRA in 2016. After deducting her IRA contribution, the adjusted gross income shown on her joint return is $36,000. Jill may claim a 50% credit, $500, for her $1,000 IRA contribution.
Additional resources
- Individual Retirement Arrangements (IRAs)
- Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs)
- Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)
- Form 8880, Credit for Qualified Retirement Savings Contributions
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