Plenty of people who qualify for the Saver’s Credit never claim it. It pays up to $1,000 per person, or $2,000 for a married couple, just for putting money into a retirement account. And 2026 is the last year it works this way.
Starting with 2027 contributions, the credit is replaced by the Saver’s Match, which sends money into your retirement account instead of cutting your tax bill. If you want the credit one last time, the contributions have to be made for 2026. For a 401(k) or other workplace plan, that means through payroll by your last paycheck of the year.
Who qualifies for 2026
You need to be at least 18, not a full time student and not claimed as a dependent on someone else’s return. Your adjusted gross income has to be under these limits, set by IRS Notice 2025-67:
- Married filing jointly: up to $80,500
- Head of household: up to $60,375
- Single or married filing separately: up to $40,250
The credit is a percentage of up to $2,000 of contributions per person. The lower your income, the higher the percentage:
- 50%: AGI up to $48,500 joint, $36,375 head of household, $24,250 single
- 20%: up to $52,500 joint, $39,375 head of household, $26,250 single
- 10%: up to the top limits above
Those brackets have sharp edges. A married couple at $48,500 gets 50%. At $48,501 they get 20%. That’s a $1,200 drop on $4,000 of contributions for one dollar of income.
What counts as a contribution
Most retirement savings count:
- Traditional and Roth IRA contributions
- 401(k), 403(b), 457(b), SIMPLE and SARSEP deferrals, including Roth deferrals
- The federal Thrift Savings Plan
- Contributions to an ABLE account if you’re the account’s beneficiary
Employer matches don’t count, and neither do rollovers. Only money you put in yourself.
Recent withdrawals reduce the credit. If you took money out of a retirement plan or IRA during 2026, 2024 or 2025, or before you file your 2026 return, those distributions are subtracted from your contributions.
The deadlines are different for IRAs and 401(k)s
For an IRA, you have until April 15, 2027 to make a 2026 contribution. So there’s still time after New Year’s for that.
A 401(k) is stricter. Deferrals count in the year they come out of your paycheck. If you want more in your plan for 2026, ask HR or log into your plan site now and raise your contribution for your last few paychecks. Payroll changes often take one or two pay periods to kick in, so waiting until mid December can be too late.
There’s a reason to use the workplace plan if you can. Pretax 401(k) deferrals lower your AGI, which can move you into a better credit bracket. A Roth IRA contribution doesn’t lower AGI at all.
Example: how a bigger contribution pays twice
Take a married couple with two jobs and no kids. After their current 401(k) deferrals, their AGI for 2026 will be $52,000. Between them they’ve already contributed $4,000.
At $52,000 they’re in the 20% tier, so their credit is $800. Their taxable income after the $32,200 standard deduction is $19,800, and their tax before credits is about $1,980. After the credit, they owe about $1,180.
Now say they raise their pretax deferrals by $3,600 before the end of the year. Their AGI drops to $48,400, which puts them in the 50% tier. Their contributions are now $7,600, but the credit only counts $4,000 of it, so the credit becomes $2,000. Their tax before credits falls to about $1,620.
The credit can’t go below zero tax, so it’s capped at $1,620. Their federal tax goes from about $1,180 to zero. They put $3,600 more into savings and cut their tax bill by about $1,180.
The credit only reduces tax you owe
The Saver’s Credit is nonrefundable. It can wipe out your federal income tax, but it can’t create a refund on its own.
That’s why a lot of low income workers get less than the full amount. A single filer with $24,000 of AGI is in the 50% tier, but after the $16,100 standard deduction their tax is only about $790. Even with $2,000 of contributions, the credit stops at $790.
Other credits come first in some cases. Families who use the child tax credit or child and dependent care credit may have little tax left for the Saver’s Credit to reduce. Our article on the child tax credit explains how its refundable part works.
How to claim it
You claim it on Form 8880 and the total goes on your Form 1040. Tax software will ask about it if your income is in range, but only if you enter your contributions correctly. Check box 12 of your W-2 for your 401(k) deferrals.
Many people who file for free or use simple returns miss it because they never fill in the form. If you qualified in 2023, 2024 or 2025 and didn’t claim it, you can file an amended return within three years.
What changes in 2027
Under the SECURE 2.0 Act, the Saver’s Match replaces the credit for 2027 contributions. Instead of reducing your tax, the government will deposit up to $1,000 a year into your eligible retirement account, a match of 50% on up to $2,000 of contributions. You claim it on your tax return for 2027, filed in 2028.
The match will phase out gradually as income rises, instead of the cliffs the credit has now. The Treasury is still working out how deposits will be made, so details may change before it starts. One thing is clear: people who owe little or no income tax and get nothing from today’s credit could get a real deposit under the match.
Questions people ask
Can I get the credit if I’m retired?
Yes, if you’re contributing to an IRA from earned income and meet the income limit. Withdrawals from your accounts will reduce or cancel the credit, which rules out many retirees.
Does a Roth IRA count?
Yes. Roth contributions count the same as traditional contributions for the credit. They just don’t lower your AGI.
I’m a student. Can I claim it?
Not if you were a full time student during any part of five months of the year. Part time students can qualify.
Can both spouses get $1,000?
Yes. On a joint return each spouse’s contributions count separately, up to $2,000 each, for a credit of up to $2,000 total.
Related reading
- Which 2026 Tax Moves Have to Happen by December 31?
- How Much EITC Will I Get? Credit Amounts and Income Limits by Year
- Check Your W-4 Before December: How to Avoid a 2026 Tax Bill and Penalty
Figures are for the 2026 tax year from IRS Notice 2025-67. This article is general information, not tax advice. Saver’s Match rules may change as the Treasury issues guidance. See our disclaimer.
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