Saver’s Credit – What Is It And How Do You Qualify For It?

If you save for retirement in an IRA or a 401(k), you can qualify for Saver’s credit if you meet certain income requirements. Saver’s credit is a $1,000 tax credit ($2,000 for married couples) that can be claimed in addition to the regular tax deduction you get for contributing to an IRA or a 401(k).

Saver’s credit qualifications

To qualify for the Saver’s credit, you must be

  • 18 years or older
  • Cannot be claimed as a dependent on another person’s return
  • Not a student
  • Meet the Saver’s credit income requirements
  • Save for retirement in a qualified retirement account such as an IRA, 401(k), 403(b), or a 457 plan
  • Contribute enough dollars to retirement to get full credit
  • Meet the Saver’s credit contribution deadline

Qualifying retirement accounts

Contribution to 401(k), traditional or Roth IRA, 403(b), 457 plans, SARSEP, or SIMPLE plan or the federal government’s Thrift Savings Plan qualify for Saver’s credit.

Retirement contributions of up to $2,000 for individuals and $4,000 for couples qualify for full Saver’s credit. Note that if you take distributions from your retirement account, your Saver’s credit will be reduced.

Income requirements

Here are the income requirements to qualify for Saver’s credit in 2022

  • Individuals – up to $34,000
  • Married couples – $68,000
  • Head of households – $51,000

Saver’s Credit Amounts

Credit RateMarried Filing JointlyHead of HouseholdAll Other Filers*
50% of your contributionAGI not more than $41,000AGI not more than $30,750AGI not more than $20,500
20% of your contribution$41,001- $44,000$30,751 - $33,000$20,501 - $22,000
10% of your contribution$44,001 - $68,000$33,001 - $51,000$22,001 - $34,000
0% of your contributionmore than $68,000more than $51,000more than $34,000

Depending on your adjusted gross income, you may be eligible for a 50%, 20% or 10% credit of the amount you contribute to a retirement account.

Contribution deadline

Though workplace retirement plans such as a 401(k) require contributions by the end of the calendar year, you have until the due date of tax return in April to make retirement contributions to get the Saver’s credit.

Saver’s credit is a credit, not a tax deduction

Saver’s credit is a tax credit. It will reduce dollar for dollar the taxes you owe. A credit is a better than a deduction.

Dependents and full-time are not eligible

People under the age of 18 or who are claimed as dependent on someone’s tax return do not qualify for Saver’s credit. If you are a full-time student who is enrolled in college for five months or more, you can’t get Saver’s credit.

Who is the Saver’s Credit for

Saver’s credit is targeted at lower to  middle income families to give them an incentive to save for retirement. Single filers who make more than $34,000 and married filers who make more than $68,000 do not qualify for the credit.


Let’s say that you are married, and you and your spouse make $40,000 per year combined. You contribute $2,000 to your IRA. You can deduct your contributions for tax purposes. You adjusted gross income is $38,000 ($40,000 minus $2,000). Based on the table, you can claim a 50% credit or $1,000 (50% of your $2,000 IRA contribution).
Let’s do another example. You are married and you and your spouse make $75,000. You make a $3,000 contribution to an IRA. Your adjusted gross income is $72,000. Based on the table above, you will not qualify for the Saver’s credit.

Bottom Line

Saver’s credit is a tax credit for contributing to qualifying retirement accounts. There are income requirements you need to meet in order to qualify for the credit. The credit amount is small, but dollar for dollar reduction in your taxes, and is much better than a tax deduction. It’s a great incentive for lower and middle income families to save for retirements.  Dependents and full-time students do not qualify for Saver’s credit.

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