Retirement Savings Contributions Credit (Saver's Credit)

Updated on: Jun 26, 2018

The saver’s credit remains the same, but the AGI limitations are annually adjusted for inflation. In addition, the new tax law permits a designated beneficiary of an Achieving a Better Life Experience (ABLE) account to claim the saver’s credit for his or her contributions made to the ABLE account before January 1, 2026. 

Previous (2017)

You may be able to take a tax credit for making eligible contributions to your IRA or employer-sponsored retirement plan. To be eligible to take the credit, you must satisfy the following requirements:

 

  • Age 18 or older;
  • Not a full-time student; and
  • Not claimed as a dependent on another person’s return.

 

The amount of the credit is 50 percent, 20 percent or 10 percent of your retirement plan or IRA contributions up to $2,000 ($4,000 if married filing a joint tax return), depending on your adjusted gross income (AGI). More information about AGI limitations and applicable percentages can be found on IRS Form 8880, Credit for Qualified Retirement Savings Contributions.

Previously, beneficiaries of ABLE accounts couldn’t claim the saver’s credit for contributions made to the ABLE account.

Change

The saver’s credit remains the same, but the AGI limitations are annually adjusted for inflation. In addition, the new tax law permits a designated beneficiary of an Achieving a Better Life Experience (ABLE) account to claim the saver’s credit for his or her contributions made to the ABLE account before January 1, 2026. 

How will this affect me?

Scenario 1

During 2018, David, who is 29 years old and disabled, contributed $2,000 to his ABLE account. David’s filing status is single and his AGI $20,000. David can claim a saver’s credit of $400 (20 percent of the $2,000 contribution) on his 2018 tax return.

Scenario 2

The same as above, but David is married to Evelyn, they file a joint tax return, and their AGI is $64,000. David and Evelyn can’t claim the saver’s credit on their 2018 joint return, because their AGI is too high.

Where to find it on the tax return: