The Saver’s Credit, also known as the Retirement Savings Contributions Credit, is a tax credit available to eligible individuals who make contributions to qualified retirement accounts, such as 401(k)s or IRAs.
This credit is designed to incentivize low- to moderate-income taxpayers to save for retirement. The amount of the credit can range from 10% to 50% of the contribution made, depending on the taxpayer’s adjusted gross income (AGI) and filing status.
For example, a single filer with an AGI of $19,750 or less in 2023 may qualify for a 50% credit on contributions up to $2,000, resulting in a maximum credit of $1,000. Eligibility requirements include being at least 18 years old, not being a full-time student, and not being claimed as a dependent on someone else’s tax return.
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