What This Rule Means
The Saver's Credit Rule
The Saver's Credit is a non-refundable tax credit of 10%, 20%, or 50% of your retirement contributions, up to in contributions per person ( MFJ). Eligible accounts include 401(k), 403(b), 457(b), SIMPLE IRA, SEP-IRA, traditional IRA, and Roth IRA.
How It Works
How the Saver's Credit Works
- You must be age 18 or older, not a full-time student, and not claimed as a dependent on someone else's return.
- The credit is non-refundable — it reduces tax owed to zero but does not generate a refund.
- Distributions taken from retirement accounts in the prior two years (or the current year before filing) reduce the contribution amount eligible for the credit.
- Maximum eligible contribution: per person. Credit applies to the first that amount contributed per person.
- The credit completely phases out above the AGI ceilings — there is no partial credit above the top threshold.
2026 AGI Credit Rate Thresholds
Credit Rate by AGI
| Credit Rate | Single / MFS AGI Limit (2026) | MFJ AGI Limit (2026) | Single / MFS AGI Limit (2025) | MFJ AGI Limit (2025) |
|---|
Example Scenario
Scenario: Claiming the 50% Credit Rate
Scenario — 50% Credit Rate
Marcus and Lisa file Married Filing Jointly with combined AGI of $44,000. Both contribute $2,000 each to their Roth IRAs in 2026.
Their Roth IRA contributions generate a non-refundable credit that directly reduces their federal tax bill.
Apply These Rules to Your Numbers
See how the Saver's Credit affects your total after-tax income.