Retirement Saver's Credit for 2022

How Saving for Retirement Can Reduce Your Taxes With a Credit

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Saving for retirement can be a major challenge when you're paying off debt or building up savings for short-term goals or emergency reserves. Fortunately, the IRS gets that. It provides an incentive, a special tax credit that's designed specifically for low- and moderate-income taxpayers. 

The saver's credit, also known as the retirement savings contributions credit, provides these taxpayers with a special tax break. They can claim the credit for a portion of the income they contribute to a qualifying retirement plan. 

Key Takeaways

  • The Retirement Savings Contributions Credit is designed for low- and moderate-income taxpayers. 
  • The tax credit is 50%, 20%, or 10% of your retirement contributions for the year, and the percentage depends on your adjusted gross income.
  • File IRS Form 8880, "Credit for Qualified Retirement Savings Contributions," to take advantage of the saver's credit.

Tax Credits vs. Tax Deductions 

To better understand the saver's credit, it's important to distinguish before tax credits and deductions. A tax credit is a dollar-for-dollar reduction of your gross tax liability—the total amount of taxes you're responsible for paying as you finish your tax return. For example, you might owe the IRS $3,000, then you go back and claim a $1,000 credit. Now you'd only owe $2,000.

The saver's credit is non-refundable, which means that it can reduce your income tax liability, but the IRS won't be sending you a check for any balance that might be left over. A deduction, on the other hand, reduced the amount of your income before you calculate the tax you owe.

Are You Eligible for the Saver's Credit?

There are three main criteria to meet to be eligible for the saver's credit:

  • You must be at least 18 years old
  • You are not a full-time student
  • You are not claimed as a dependent on another person’s tax return


You must make eligible contributions to your IRA or employer-sponsored retirement plan for the tax year in which you're claiming the credit.

How Much Can the Credit Cut Your Tax Bill?

The tax credit is 50%, 20%, or 10% of your retirement plan or IRA contributions for the year, depending on your adjusted gross income (AGI). For that reason, the saver's credit is most beneficial for taxpayers with low incomes.

The maximum credit amount is $2,000 as of 2022, or $4,000 if you're married and filing a joint return.

Contributions for the 2021 Tax Year

  Married Filing Jointly Head of Household All Other Filers
50% of your contributions $39,500 or less $29,625 or less $19,750 or less
20% of your contribution $39,501 - $43,000 $29,626 - $32,250 $19,751 - $21,500
10% of your contribution $43,001 - $66,000 $32,251 - $49,500 $21,501 - $33,000
No credit available More than $66,000 More than $49,500 More than $33,000

The above contribution limits and income thresholds are applicable for your 2021 tax return, which you file in 2022. The first column defines how much of your contribution you can claim, followed by the income parameters for each percentage for the different filing statuses.

Contributions for the 2022 Tax Year

  Married Filing Jointly Head of Household All Other Filers
50% of your contributions $41,000 or less $30,750 or less $20,500 or less
20% of your contributions $41,001- $44,000 $30,751 - $33,000 $20,501 - $22,000
10% of your contributions $44,001 - $68,000 $33,001 - $51,000 $22,001 - $34,000
No credit available more than $68,000 more than $51,000 More than $34,000

The income thresholds for the credit percentages are indexed for inflation. They can increase annually. The figures above are relevant to the tax return you will file in 2023. 

Eligible Retirement Accounts

The saver's credit can be claimed when you make contributions to certain types of retirement accounts:

  • Traditional or Roth IRAs
  • 401(k) plans
  • 403(b) plans
  • 457(b) plans
  • Thrift Savings Plans (TSP)
  • Simplified Employee Pension (SEP) plans
  • Section 501(c)(18) plans

Contributions aren't eligible for the saver's credit if you completed a rollover from a qualified plan or an IRA. Plus, your eligible contributions would be reduced by the amount received if you took any distributions from a retirement plan or IRA. 


There are some instances where, even if you are making contributions to the above-mentioned accounts, you can't take the credit. See Form 8880 instructions for more specific details that may be relevant for your tax situation.

How To Claim the Saver's Credit

File IRS Form 8880, "Credit for Qualified Retirement Savings Contributions," to take advantage of the Saver's Credit. You must use the Form 1040 tax return or Form 1040NR.

Frequently Asked Questions (FAQs)

Which retirement contribution does not qualify for the saver's credit?

With this credit, you can include contributions to just about any type of retirement plan when claiming the credit, including a 401(k) plan, traditional IRA, Roth IRA, SIMPLE IRA, or 403(b) plan. However, rollover contributions do not qualify for the credit.

Is the retirement saver's tax credit refundable?

No, the retirement saver's credit is non-refundable. That means the credit can reduce the total amount of taxes you you owe to zero, but it can't provide you with a tax refund.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. IRS. "Credits and Deductions for Individuals."

  2. IRS. "Retirement Savings Contributions Credit (Saver’s Credit)."

  3. Internal Revenue Service. "Retirement Savings Contributions Credit (Saver's Credit)."

  4. Form 8880. "Credit for Qualified Retirement Savings Contributions," Page 2.

  5. IRS. "Retirement Savings Contributions Credit (Saver’s Credit)."

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