How this calculator works
Tax year: 2026, United States. The credit is a percentage of up to $2,000 of eligible contributions for each person, so up to $4,000 on a joint return when both spouses contribute. The percentage is 50% at the lowest incomes, 20% in the next band and 10% above that, and it drops to zero above the top income limit for the filing status. The credit is nonrefundable, so it can reduce tax to zero but cannot produce a refund, which is different from a deduction and from the refundable credits such as the Earned Income Tax Credit. This credit is scheduled to be replaced by the Saver's Match for 2027 and later years. The model leaves out the age 18 rule, the full-time student rule, the dependency rule, the reduction for distributions received in the testing period, the amount of tax actually owed and state credits.
Formula
Contributions counted = min(your contributions, $2,000) plus, on a joint return, min(spouse contributions, $2,000). Credit rate = 50% if adjusted gross income is at or below the first limit, 20% if at or below the second, 10% if at or below the third, otherwise zero. Credit = contributions counted x credit rate.
Worked example
A joint return with $45,000 of adjusted gross income and $2,000 of eligible contributions from each spouse is below the $48,500 first limit, so the rate is 50%. The credit is 50% of $4,000, which is $2,000. A single filer with $2,000 of contributions and $30,000 of adjusted gross income is in the 10% tier and receives $200.
Frequently asked questions
What is the Saver's Credit?
It is a nonrefundable federal credit for eligible contributions to an IRA or workplace retirement plan. It is claimed on Form 8880 and is worth between 10% and 50% of up to $2,000 of contributions, or $4,000 on a joint return.
What is the income limit for the Saver's Credit in 2026?
The credit ends above $80,500 on a joint return, $60,375 for head of household and $40,250 for single or married filing separately.
Does the credit use adjusted gross income?
Yes. The tier is set by adjusted gross income, not by taxable income, so deductions below the line do not change it.
Do Roth IRA contributions qualify?
Yes. Contributions to a Roth or traditional IRA and to a workplace plan such as a 401(k) or 403(b) generally count, but rollovers and distributions taken in the testing period reduce the amount.