A tax credit for contributing to a retirement account, on top of whatever tax-deferred or Roth benefit the account itself already provides — but it’s a cliff-based tier system, not a gradual phase-out.
How it works
Based on AGI and filing status, a contribution up to the eligible limit qualifies for a 50%, 20%, or 10% credit rate. Crossing from one AGI bracket into the next drops the rate sharply rather than tapering it down gradually.
What this does not include
2025 and 2026 are the final years for this credit in its current form — starting in 2027, a new “Saver’s Match” program replaces it with a different structure, which this calculator doesn’t model.
How to use this calculator
- Enter your filing status, AGI, and retirement contribution amount.
Frequently asked questions
Why is the rate a “cliff” instead of a gradual phase-out?
Because the credit uses fixed AGI brackets — crossing from one bracket to the next by even one dollar can drop the rate sharply from, say, 50% to 20%, unlike many other tax provisions that phase out gradually.
Can this credit be combined with a 401(k) or IRA tax deduction?
Yes — the Saver’s Credit is separate from and in addition to any deduction or tax-deferred treatment the retirement contribution itself already receives.
What replaces the Saver’s Credit after 2026?
Starting in 2027, a new “Saver’s Match” program is scheduled to replace it, depositing a federal matching contribution directly into the retirement account rather than applying as a tax credit.
