Starting in 2027, a long-standing credit is gone and a new one takes it's place.
2026 is the last year for the saver’s credit. This tax credit has rewarded low- and middle-incomers who contributed money to an IRA, 401(k), 403(b), SEP or similar retirement plan. The maximum credit is $2,000 for joint filers and $1,000 for other filers is capped at 50%, 20% or 10% of contributions, depending on your AGI (adjusted gross income). In 2026, the saver’s credit fully phases out at AGIs of $40,250 for single filers, $60,375 for household heads and $80,500 for married couples filing a joint return.
Starting in 2027, the saver’s credit will be replaced with a 50% government match on up to $2,000 of contributions per person, contributed directly into the saver’s retirement account. The results is a nontaxable $1,000 maximum government match per individual. For married couples filing a joint return, the saver’s match applies to each spouse. Eligible retirement contributions include traditional and Roth IRA, and elective deferrals or contributions to 401(k)s and other workplace retirement plans. Starting in 2027, people who don't have an IRA or other retirement plan can go to TrumpIRA.gov for help in finding an IRA.
The saver’s match starts to phase out at modified AGIs over $41,000 for joint filers, $30,750 for head-of-household filers and $20,500 for single filers. The break ends at modified AGIs of $71,000, $53,250 and $35,500, respectively. These modified AGI figures will be annually adjusted for inflation starting in 2028.
If your AGI qualifies, you claim the saver’s match contributions on Form 8880-A and attach it to your Form 1040s that you will file in 2028 and subsequent years. Unlike the saver's credit, you don't need to have a tax liability to claim the saver’s match contribution in any year. This is because the break is a government match, and not a tax credit. But you must file a tax return to get the saver’s match, even if your taxable income is less than that required to file a return. You state on Form 8880-A that the saver’s match be made to your retirement account. Then the government will pay the match directly to your saver’s retirement account as soon as practicable after you file your tax return. A caveat is that if the claimed saver’s match is less than $100, you can report it as a refundable tax credit on your return. IRS notice 2026-48 has complete details on this new saver’s match contribution.
You may want to also keep an eye on this Senate proposal that would expand the saver’s match. Sen. Ron Wyden (D-OR) has a bill that would double the match rate from 50% to 100%, making the maximum government contribution $2,000 instead of $1,000. This would significantly hike the modified AGI levels at which the match would phase out. And it would treat the government’s match as a post-tax Roth IRA contribution (meaning non-taxable). Whether this get through the senate or not is always up in the air. Stay Tuned.
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