Saver's Credit
The IRS pays you to save for retirement — up to $1,000 free if you're a single low/moderate earner ($2,000 if married). Less than 12% of eligible filers claim it.
Line 11 on Form 1040. Your income after pre-tax 401(k) and IRA contributions.
401(k), 403(b), traditional IRA, Roth IRA, SIMPLE, or 457(b). Both Roth and traditional count.
If you're a student or dependent, you're not eligible regardless of income.
Estimated Saver's Credit (2024)
$0
Free money from the IRS — just for saving for your own retirement.
Credit rate
0%
AGI limit (your status)
$0
Status
—
How it works
The credit is 50% / 20% / 10% of your contributions (up to $2,000 single / $4,000 MFJ counted), based on your AGI. Lower income = higher rate. It's non-refundable — it can wipe out tax you owe but won't increase your refund past zero. Still: if you owe $500 in tax and qualify for a $1,000 Saver's Credit, that $500 of tax disappears.
The double-dip
Saver's Credit works on top of the tax deduction you already get for traditional 401(k) / IRA contributions. So if you're in the 12% federal bracket and qualify for the 50% Saver's Credit on a $2,000 401(k) contribution: you save $240 (deduction) + $1,000 (credit) = $1,240 for putting away $2,000. The IRS is paying you to save.
How to claim it
File Form 8880 with your return. Most tax software does this automatically if you tell it you made retirement contributions. If you're using VITA or IRS Free File they'll ask. The mistake people make is not telling the software about their Roth IRA contributions — Roth IRA isn't on a W-2, so easy to forget.