Understand the 2025 Saver’s Tax Credit eligibility, income limits, tax benefits, and how to calculate your credit. Claim your benefit now—check the calculator below!
What Is the Saver’s Tax Credit?
The Saver’s Tax Credit is a non-refundable tax credit offered by the IRS to encourage low-to-moderate income earners to save for retirement. You can receive a credit of up to 50% of your retirement contributions, depending on your income level.
Note: Non-refundable credit means you can only reduce your taxes down to $0. If you owe no tax, you won’t get a refund.
2025 Saver’s Tax Credit Income Limits (AGI)
Your Adjusted Gross Income (AGI) and filing status determine whether you qualify for a 50%, 20%, 10%, or 0% credit.
| Filing Status | 50% Credit | 20% Credit | 10% Credit | No Credit |
|---|---|---|---|---|
| Single | Up to $23,000 | $23,001 – $25,000 | $25,001 – $38,250 | $38,251 or more |
| Married Filing Jointly | Up to $46,000 | $46,001 – $50,000 | $50,001 – $76,500 | $76,501 or more |
| Head of Household | Up to $34,500 | $34,501 – $37,500 | $37,501 – $57,375 | $57,376 or more |
| Married Filing Separately | Up to $23,000 | $23,001 – $25,000 | $25,001 – $38,250 | $38,251 or more |
How Is the Credit Calculated?
The credit is calculated as:
Retirement Contributions × Credit Rate = Tax Credit Amount
For example, if you contribute $4,000 and your credit rate is 10%, you’ll receive a $400 tax credit.
Maximum credit: $2,000 per person, $4,000 per couple filing jointly.
Example Scenarios
Example 1: Married Filing Jointly, AGI $41,000
- Standard Deduction: $29,200
- Taxable Income = $41,000 – $29,200 = $11,800
- Tax Rate: Entire amount taxed at 10% (up to $23,200 is 10%)
- Tax Owed: $11,800 × 10% = $1,180
- Retirement Contribution: $4,000 → 50% credit = $2,000
- Since credit is non-refundable, max benefit is $1,180 (actual tax owed)
Without Saver’s Credit: You pay $1,180 in tax.
With Saver’s Credit: You pay $0 in tax (full credit used).
Example 2: Married Filing Jointly, AGI $52,000
- Standard Deduction: $29,200
- Taxable Income = $52,000 – $29,200 = $22,800
- Tax Rate: Entire income still taxed at 10%
- Tax Owed: $22,800 × 10% = $2,280
- Retirement Contribution: $4,000 → 10% credit = $400
Without Saver’s Credit: Tax = $2,280
With Saver’s Credit: Tax = $1,880
Why Saver’s Credit Matters
Saver’s Credit reduces your tax bill and encourages retirement savings. Here’s a quick comparison:
| Scenario | No Saver’s Credit | With Saver’s Credit | Tax Savings |
|---|---|---|---|
| MFJ, AGI $41,000 | $1,180 | $0 | $1,180 |
| MFJ, AGI $52,000 | $2,280 | $1,880 | $400 |
| MFJ, AGI $80,000 | $4,200 | $4,200 | $0 |
How to Claim the Credit
To claim the Saver’s Credit, use Form 8880 - Credit for Qualified Retirement Savings Contributions when you file your tax return.
👉 Click here to visit the official IRS page
💰 Saver’s Tax Credit Calculator (2025)
Enter your AGI and retirement contribution to estimate your tax credit.
