Some retirement savers can still get a ‘special tax credit,’ IRS says — but most don’t claim it

There’s still time for some taxpayers to claim a tax credit called the “saver’s credit” for the 2023 tax year.

To qualify, you must make contributions to qualified retirement accounts like IRAs or 401(k) plans.

This credit can save you money on your taxes, as it allows you to reduce your tax bill by a certain percentage of your contributions.

The maximum amount you can receive for the 2023 tax year is $1,000 for single filers or $2,000 for married couples filing jointly.

However, despite the potential benefits, less than 6% of eligible taxpayers claim this credit.

One reason for this is that many low-income earners have no tax liability, and this credit is non-refundable.

Additionally, many people simply don’t know about this credit.

The saver’s credit is scheduled to convert to a saver’s match in 2027, which will address some of its current limitations.

In the meantime, experts recommend increasing access to employer-sponsored retirement plans with automatic contributions to encourage more people to save for their future.