What Is the Retirement Savings Credit?

By Matthew Frankel, CFP – Updated Jul 3, 2025 at 1:14 PM

Key Points

The Saver's Credit offers up to $2,000 for qualifying low- to middle-income households.
Eligibility includes making contributions to retirement accounts and meeting specific income thresholds.
This credit can increase each household's tax savings, enhancing retirement investment benefits.

Many people are aware of the basic tax advantages of investing for retirement in accounts like individual retirement accounts (IRAs) and 401(k)s. If you have a traditional (pre-tax) retirement account, your contributions may be tax-deductible in the year they were made; with after-tax (Roth) accounts, any eventual qualified withdrawals can be completely tax-free.

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An egg with the word Retirement written on it sitting in a nest. — Image source: Getty Images.

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Retirement savings contributions credit income (adjusted gross income) ranges.
Credit Percentage	Married Filing Jointly	Head of Household	Single
50%	$46,000 or less	$34,500 or less	$23,000 or less
20%	$46,001 to $50,000	$34,501 to $37,500	$23,001 to $25,000
10%	$50,001 to $76,500	$37,501 to $57,375	$25,001 to $38,250
0%	Over $76,500	Over $57,375	$38,250

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Let's say you’re a married couple with an adjusted gross income of $75,000 in 2024. Each spouse contributes more than $2,000 to their employer's 401(k) plan.

This income level puts them in the 10% multiplier. Since the two spouses have a total of $4,000 of qualifying retirement contributions, they would be entitled to a tax credit of $400 for the 2024 tax year.

Free money to save for retirement

The Saver's Credit literally provides free money to help qualifying taxpayers save for retirement. And you don't need to do anything particularly extraordinary to get it. Simply contribute money to your employer's retirement plan or create a retirement account of your own. When combined with the other tax advantages of retirement saving, the Saver's Credit is definitely worth using.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

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