Saver's credit

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The Saver's credit is a non-refundable tax credit for taxpayers who make eligible contributions to eligible retirement plans. The credit was first established for the tax years 2002 to 2006 under the economic growth and tax relief reconciliation act of 2001 (EGTRRA, Sec. 618).[1] and was made permanent under the Pension Protection Act of 2006 (PPA), Sec. 801. [2]

Eligible taxpayers

In order to qualify for the saver's credit, a taxpayer must meet three qualifications. The taxpayer must be:

  • Age 18 or older;
  • Not a full-time student; [note 1] and
  • Not claimed as a dependent on another person’s return.

Eligible plans

The saver’s credit can be taken for contributions to a traditional or Roth IRA; 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and voluntary after-tax employee contributions to qualified retirement and 403(b) plans. [3]

Income eligibility

The amount of the credit is 50%, 20% or 10% of a taxpayer's retirement plan or IRA contributions up to $2,000 ($4,000 if married filing jointly), depending on adjusted gross income (reported on Form 1040 or 1040A.[3] The qualifying income limits for the 2016 tax year is provided in the tables below:

2017 Saver's Credit [3]
Credit Rate Married Filing Jointly Head of Household All Other Filers*
50% of your contribution AGI not more than $37,000 AGI not more than $27,750 AGI not more than $18,500
20% of your contribution $37,001 - $40,000 $27,751 - $30,000 $18,501 - $20,000
10% of your contribution $40,001 - $62,000 $30,001 - $46,500 $20,001 - $31,000
0% of your contribution more than $62,000 more than $46,500 more than $31,000

*Single, married filing separately, or qualifying widow(er)

Note that the credit is based on Adjusted Gross Income; if you contribute to a deductible IRA or 401(k), this will lower your AGI and may make you eligible for a larger credit. You can even contribute to a deductible IRA for the previous year through April 15 of the current year in order to move to a different credit category.

Testing period

The saver's credit can be reduced or the taxpayer rendered ineligible for the credit if a taxpayer (or taxpayer's spouse if filing a joint return) receives a distribution from a qualifying retirement plan. There is a testing period imposed when taking the credit. The testing period is the two years preceding the year for which the credit is claimed, and/or January 1 to April 15 of the year following the year for which the credit is claimed. For example, if the saver's credit is claimed for 2014, distributions that occur during tax years 2012 and 2013, and from January 1, 2015, to April 15, 2015, could affect the individual's eligibility to claim the credit.[4]


  1. Full-time student requirements,(Pub 950A):
    • You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either:
    • A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or
    • A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government.
    Note that you are a full-time student if you are enrolled for the number of hours or courses the school considers to be full time.


  1. 2001 EGTRRA, reviewed 16 February 2015.
  2. Pension Protection Act of 2006 (PPA), reviewed 16 February 2015.
  3. 3.0 3.1 3.2 Retirement Topics - Retirement Savings Contributions Credit (Saver’s Credit), reviewed 03 November 2016.
  4. Saver's Tax Credit: A Retirement Savings Incentive, Denise Appleby, investopedia. Reviewed 16 February 2015.