Saver's Credit 2023 - The Living Planner

Are you aware of the Saver’s Credit you’re entitled to when you contribute to your IRA or employer-sponsored plan? Each year the IRS outlines who’s eligible, the amount you may contribute, and the Saver’s Credit you’ll receive. Sharing the specifics for the 2023 tax year from the IRS!

Image by Nattanan Kanchanaprat from Pixabay

Who’s Eligible?

You’re eligible for the credit if you’re:

Age 18 or older,
Not claimed as a dependent on another person’s return, and
Not a student.

You were a student if during any part of 5 calendar months of the tax year you:

Were enrolled as a full-time student at a school, or
Took a full-time, on-farm training course given by a school or a state, county, or local government agency.

A school includes technical, trade, and mechanical schools. It does not include on-the-job training courses, correspondence schools, or schools offering courses only through the Internet.

See Form 8880, Credit for Qualified Retirement Savings Contributions, for more information.

Amount of the Credit

Depending on your adjusted gross income reported on your Form 1040 series return, the amount of the credit is 50%, 20% or 10% of:

contributions you make to a traditional or Roth IRA,
elective salary deferral contributions to a 401(k), 403(b), governmental 457(b), SARSEP, or SIMPLE plan,
voluntary after-tax employee contributions made to a qualified retirement plan (including the federal Thrift Savings Plan) or 403(b) plan,
contributions to a 501(c)(18)(D) plan, or
contributions made to an ABLE account for which you are the designated beneficiary (beginning in 2018).

Rollover contributions do not qualify for the credit. Also, your eligible contributions may be reduced by any recent distributions you received from a retirement plan or IRA, or from an ABLE account.

The maximum contribution amount that may qualify for the credit is $2,000 ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly). Use the chart below to calculate your 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)

IRS Additional Resources

Image by Nattanan Kanchanaprat from Pixabay

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