How much of your contributions you can claim as a credit depends on your adjusted gross income (AGI) and your federal income tax filing status. Learn more about qualifying for and claiming the Saver’s Credit on your federal income taxes.
Qualifying for the Saver’s Credit
You can include contributions to just about any type of retirement plan when claiming the credit, including contributions to a:
401(k) plan Traditional or Roth IRA 403(b) or 457(b) plan SARSEP or SIMPLE plan Thrift Savings Plan 501(c)(18)(D) plan ABLE account for which you are the designated beneficiary
However, rollover contributions, which are funds that you move from one retirement plan to another, don’t qualify. Even if you made contributions to a retirement account, you need to meet other criteria to qualify for the credit. In addition to having contributed money to a qualifying plan, you must:
Meet income limitsBe aged 18 or olderNot be claimed as any other taxpayer’s dependentNot be a student
A student is anyone who was enrolled as a full-time student at a school or who took a full-time, on-farm training course given by a school or government agency for at least five calendar months of the tax year.
Income Limits for the Saver’s Credit
The Saver’s Credit is limited by your AGI, which is based on your filing status. Your AGI is your gross income minus adjustments to income, such as educator expenses, student loan interest, and alimony payments. Depending on your income, you can claim between 0% and 50% of your contributions as a tax credit. For the 2021 tax year (the return you will file in 2022), you become ineligible for the credit (0%) if your AGI is more than:
$33,000 if your filing status is single, married filing separately, or qualifying widow(er)$49,500 if your filing status is head-of-household$66,000 if your filing status is married filing jointly
For the 2022 tax year (the return you will file in 2023), you become ineligible for the credit if your AGI is more than:
$34,000 if your filing status is single, married filing separately, or qualifying widow(er)$51,000 if your filing status is head-of-household$68,000 if your filing status is married filing jointly
Calculating Your Retirement Savings Contributions Credit
The amount of your tax credit is a percentage of your retirement contributions. The maximum contribution limit that the credit can be applied toward is $2,000 (maximum $1,000 credit) for taxpayers who file as single, head-of-household, qualifying widow(er), or married filing separately. It’s $4,000 (maximum $2,000 credit) for married taxpayers who file a joint return. You could claim a credit of $400, or 20% of the contribution limit, if your income were $30,000. You would be entitled to a credit of 50% of the $2,000 limit—or $1,000—if your AGI were $29,000. These income limits are adjusted for inflation, so they increase for tax year 2022 (the return you will file in 2023). You must be the designated beneficiary of the account to claim the Saver’s Credit. The same income limits and other requirements apply based on filing status. Rollovers from other accounts don’t qualify as contributions in this type of account either.
How to Claim the Saver’s Credit
To claim the Saver’s Credit on your federal income tax return, first complete IRS Form 8880. Transfer the amount that appears on line 12 to Schedule 3, line 4. Then transfer the total of all nonrefundable credits you qualify for on line 7 of Schedule 3 to line 20 of your Form 1040. Attach Form 8880 and Schedule 3 to your tax return. If you use tax preparation software, it will prompt you to answer questions about your retirement savings and can complete these forms automatically for you. They will then be printed or e-filed with your full return, depending on the option you select.
