The Saver's Credit

The saver's credit provides a tax incentive for low and moderate income earners to save for retirement. A tax credit is available, which will reduce a taxpayers taxes or add to your refund.

The maximum tax credit is $1,000 ($2,000 if married filing jointly). If you made contributions to a retirement plan, including a traditional IRA or Roth IRA, you may be able to claim the retirement savings contribution credit, (referred to as the saver's credit) on your 2013 return.

The credit amount is based on the taxpayer's:

  • Filing status
  • Adjusted gross income
  • Tax liability
  • Amount contributed to qualifying retirement programs.
Saver's Credit Based on Adjusted Gross Income for 2013
Credit Rate Married Filing Jointly Head of Household Single, Married Filing Separately, or Qualifying Widow or Widower
50% up to $35,500 up to $26,625 up to $17,750
20% $35,501 - $38,500 $26,626 - $28,875 $17,751 - $19,250
10% $38,501 - $59,000 $28,876 - $44,250 $19,251 - $29,500
0% over $59,000 over $44,250 over $29,500

Maximum Credit Amount

The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs.

Like other tax credits, the saver’s credit can increase a taxpayer’s refund or reduce the tax owed. The maximum credit is $1,000 ($2,000 for married couples filing jointly). However, if you have other deductions and credits, the saver's credit could be reduced or even eliminated.

Certain retirement plan distributions reduce the contribution amount used to figure the credit. For 2013, this rule applies to distributions received after 2010 and before the due date, including extensions, of the 2013 return. Form 8880 and its instructions have details on making this computation.


The deadline for setting up a new IRA or adding money to an existing one is April 15, 2014. However, elective deferrals (contributions) must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees.

Employees who don't have sufficient funds this year may want to schedule 2014 contributions before the end of 2013 so their employer can begin withholding them in January.

Who Can Claim the Saver's Credit?

The saver’s credit can be claimed by:

  • Married couples filing jointly with incomes up to $59,000 in 2013 or $60,000 in 2014.
  • Heads of Household with incomes up to $44,250 in 2013 or $45,000 in 2014.
  • Single taxpayers and married individuals filing separately with incomes up to $29,500 in 2013 or $30,000 in 2014.

Other special rules:

  • Eligible taxpayers must be at least 18 years of age.
  • Anyone claimed as a dependent on someone else’s return cannot take the credit.
  • A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student.

How to Claim the Saver's Credit

Form 8880 is used to claim the saver’s credit, and its instructions have details on figuring the credit correctly.

Historical Note

Begun in 2002 as a temporary provision, the saver’s credit was made a permanent part of the tax code in legislation enacted in 2006. To help preserve the value of the credit, income limits are now adjusted annually to keep pace with inflation. More information about the credit is on

In tax-year 2011, the most recent year for which complete figures are available, saver’s credits totaling just over $1.1 billion were claimed on nearly 6.4 million individual income tax returns. Saver’s credits claimed on these returns averaged $215 for joint filers, $166 for heads of household and $128 for single filers.

File your personal and small business taxes (Schedule C)