What is the Retirement Savings Contributions Credit?

Update: this article has been updated for the 2022 and 2023 tax years. Also, check out my Saver’s Credit overview for more details on the Retirement Savings Contribution Credit.




Yet another case where making less income actually pays off. If your income is below the following adjusted gross income (AGI) levels for the 2022 and 2023 tax years, you may be eligible for the Retirement Savings Contribution Credit (The Saver’s Credit) on your tax return.

That’s right, this is not a deduction, but a credit, just for saving your own money and harnessing the tax benefits of doing so.

Retirement Savings Contribution Credit

What is the Retirement Savings Contribution Credit?

The Retirement Savings Contribution Credit (aka the “Saver’s Credit”) is a tax credit that the IRS offers to incentivize low and moderate income taxpayers to make retirement contributions to an eligible retirement account (e.g. IRA, 401K, 403B, 457B, or any other IRS recognized retirement account). In a way, it’s free money from Uncle Sam, to reward the behavior of saving for retirement.

Who is eligible to claim the Retirement Savings Contribution Credit?

Maximum Income Level for the Retirement Savings Contribution Credit in 2022

The AGI (adjusted gross income) limit to qualify for the Retirement Savings Contribution Credit in 2022 is:




  • $34,000 for single filers and married individuals filing separately
  • $51,000 for heads of household
  • $68,000 for married couples filing jointly

Maximum Income Level for the Retirement Savings Contribution Credit in 2023

The AGI (adjusted gross income) limit to qualify for the Retirement Savings Contribution Credit in 2023 is:

  • $36,500 for single filers and married individuals filing separately
  • $54,750 for heads of household
  • $73,000 for married couples filing jointly

Am I Eligible for the Retirement Savings Contribution Credit?

If you are below the previously mentioned income thresholds, you simply need to make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA). The amount of the saver’s credit you can get is based on the contributions you make and your credit rate (which depends on your income level).

How Much is the Credit Worth?

If you are eligible for the credit, your credit rate can be as low as 10% or as high as 50%, depending on your adjusted gross income. The lower your income is, the higher the credit rate. Check out the Saver’s Credit article I highlighted at the top of this article for more details.

Your credit rate also depends on your filing status. The maximum credit anyone could receive is 50% on a $2,000 contribution (for $1,000), but your total may vary. To figure out exactly how much you can make, use IRS Form 8880, also known as the Credit for Retirement Savings Contributions.

How Can I Claim the Retirement Savings Contribution Credit?

Once you’ve filled out Form 8880, enter the amount of the credit on Form 1040 (PDF). If you’re looking for further information, you can also check out Chapter 3 of IRS Publication 590, Individual Retirement Arrangements (IRAs), for more information.

One last thing – if you are a full-time student for 5 months out of the calendar year, you are not eligible for the credit.

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  1. Diana

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