Getting tax credit for your retirement savings
If you participate in your employer's retirement plan—such as a 401(k), 403(b), or 457(b) plan—you may qualify for an annual IRS tax credit, just by saving for retirement. Depending on your individual circumstances, the Saver's Credit may help reduce your overall annual income tax.
How to qualify for the Saver's Credit
You qualify if you meet all of the following criteria:
- You contribute to an employer-sponsored retirement plan (401(k), 403(b), 457(b) or to an IRA (Roth or Traditional)
- You are 18 years of age or older
- You were not a full-time student during the calendar year
- You are not claimed as a dependent on another person's income tax return
- Your income falls within limits established by the IRS
The amount of the Saver's Credit
The Saver's Credit is a dollar-for-dollar reduction in income tax. The amount of the saver's credit you can qualify for is based on the retirement plan contributions you make and your credit rate. The credit rate ranges from 10% to 50%, depending on adjusted gross income and filing status. Qualifying participants with the lowest income qualify for the highest saver's credit.
2023 Saver's Credit
| Credit Rate | Married Filing Jointly | Head of Household | All Other Filers* |
| 50% of your contribution | AGI not more than $43,500 | AGI not more than $32,625 | AGI not more than $21,750 |
| 20% of your contribution | $43,501 - $47,500 | $32,626 - $35,625 | $21,751 - $23,750 |
| 10% of your contribution | $47,501 - $73,000 | $35,626 - $54,750 | $23,751 - $36,500 |
| 0% of your contribution | more than $73,000 | more than $54,750 | more than $36,500 |
*Single, married filing separately, or qualifying widow(er)
How to claim the Saver's Credit
Complete IRS Form 8880, "Credit For Qualifying Retirement Plan Contributions," and attach the completed form to your Form 1040 for tax filing purposes.
Other considerations
The credit is based on the amount you contributed to your qualified retirement plan during the year. Any distribution you received from your retirement plan must be subtracted from your contribution amount.1
For more information
For more information on the Saver's Credit, go to the IRS website at http://www.irs.gov and review IRS Publication 590-A, Individual Retirement Arrangements, Chapter 3, Retirement Savings Contributions Credit, and Form 8880. Publications and forms can be downloaded or ordered by calling 800-TAX-FORM (800-829-3676).
Contact your payroll or benefits office for information about your employer's retirement plan.
1 This rule applies to distributions received in the two years before the year the credit is claimed, the year the credit is claimed, and the period after the end of the credit year but before the due date — including extensions — for filing the return for the credit year. Please see IRS Form 8880 for more detailed information.
This article is provided for your informational purposes only.
Please be advised that this material is not intended as legal or tax advice. Accordingly, any tax information provided in this material is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent advisor.
Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (NY, NY); Equitable Financial Life Insurance Company of America, an AZ stock company with an administrative office located in Charlotte, NC; and Equitable Distributors, LLC. Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI & TN).
