2016 Saver's Credit Income Limit
For 2016, the Saver's Credit Income Limit figures are $37,000 (Maximum AGI for the 50% credit rate, married taxpayers filing a joint return), $40,000 (Maximum AGI for the 20% credit rate, married taxpayers filing a joint return), $61,500 (Maximum AGI for the 10% credit rate, married taxpayers filing a joint return) and 10 more figures below.
| Item | Married taxpayers filing a joint return | Taxpayers filing as head of household | All other taxpayers |
|---|---|---|---|
| Maximum AGI for the 50% credit rate | $37,000 | $27,750 | $18,500 |
| Maximum AGI for the 20% credit rate | $40,000 | $30,000 | $20,000 |
| Maximum AGI for the 10% credit rate | $61,500 | $46,125 | $30,750 |
Effective 2016-01-01Source: Notice 2015-75 (IRS)Verified 2026-09-03
Highest-tier applicable percentage, Middle-tier applicable percentage, Lowest non-zero-tier applicable percentageSource: United States Code (2016 edition), Title 26 Section 25B (Office of the Law Revision Counsel)Verified 2026-09-03
Maximum eligible contribution per personSource: Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)Verified 2026-09-03
Maximum AGI for the 50% credit rate
Maximum AGI for the 20% credit rate
Maximum AGI for the 10% credit rate
$18,500$61,500
One dot per column of the table, on a scale running from the smallest of these amounts to the largest. The scale is logarithmic, so that the amounts crowded at the low end stay far enough apart to read. The table states which dot is which.
Who it applies to
Taxpayers who claim the retirement savings contribution credit (saver's credit) under IRC § 25B
What changed this year, and why
For 2016, the maximum adjusted gross income limits for the retirement savings contribution credit (saver's credit) increased slightly. The maximum AGI for married taxpayers filing jointly is $61,500, for heads of household it is $46,125, and for all other taxpayers it is $30,750.
Common questions
- Can I claim the saver's credit if my income is above these limits?
- Yes. If your adjusted gross income is above the limit for your filing status, you cannot claim the credit. The limits are based on your AGI for the tax year.
Every amount on this page is a published figure rather than yours. The Saver's Credit calculator for a joint return takes the number you enter and works it out against them, showing which published figure it used.
Three things that disqualify you even under the income limit
You cannot take the saver's credit even if your income is under the limit when any one of these three conditions applies to the person who made the qualified contribution or elective deferral: the person was born after January 1, 1999; the person is claimed as a dependent on someone else's 2016 tax return; or the person was a student during 2016. If your spouse made the contribution, the same rules apply to them. You must check all three conditions before claiming the credit. Meeting the income threshold alone is not enough; you also must not be a dependent, must be at least age 18 by the end of 2015, and must not have been a full-time student for any part of five calendar months in 2016.
The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1999, (b) is claimed as a dependent on someone else’s 2016 tax return, or (c) was a student (see instructions).
Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)
The credit rate falls in steps as income rises
The credit rate is determined by a table on Form 8880 that matches your adjusted gross income and filing status to an applicable decimal amount. This decimal is the percentage of your eligible contributions that becomes the credit. As income rises through the brackets, the decimal falls in steps until it reaches .0, meaning no credit at all. For married taxpayers filing jointly, the decimal drops to .0 once income exceeds $61,500. For heads of household, it drops to .0 above $46,125. For all other filing statuses, it drops to .0 above $30,750. Between the lowest bracket and these upper limits, the decimal steps down through several tiers. If the applicable decimal amount for your situation is .0, you cannot take the credit.
$61,500 --- .0 .0 .0 Note: If line 9 is zero, stop; you cannot take this credit.
Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)
Only the first $2,000 of contributions counts
For 2016, only the first $2,000 of each person's eligible retirement contributions counts toward the Saver's Credit. Line 6 of Form 8880 asks you to enter the smaller of line 5 or $2,000 in each column (one for you and one for your spouse if filing jointly). This means even if you contributed more than $2,000 to your retirement account, the credit calculation uses only $2,000 per person. If your line 5 amount (total contributions minus certain recent distributions) is less than $2,000, you use that smaller amount instead. For married couples filing jointly, each spouse can have up to $2,000 counted separately. After line 6 is completed, the amounts are added together on line 7, and then multiplied by the applicable decimal amount from the income table to determine the credit.
6 In each column, enter the smaller of line 5 or $2,000 . . . . . . 6
Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)
Recent withdrawals cut the contributions you can count
If you received certain distributions from a retirement account after 2013 and before the due date (including extensions) of your 2016 tax return, those withdrawals reduce the contributions that can count toward the Saver's Credit. On Form 8880, these distributions are entered on line 4 and subtracted from your total contributions on line 3 to arrive at the amount on line 5. If line 5 is zero or less, you enter zero. This rule prevents taxpayers from taking money out of retirement accounts and then claiming a credit for new contributions in the same year. For married couples filing jointly, both spouses' distribution amounts must be included in both columns. There are some exceptions described in the instructions, such as certain rollovers and trustee-to-trustee transfers that do not count as distributions. After the subtraction on line 5, the result is compared to the contribution cap on line 6 to determine eligible contributions.
4 Certain distributions received after 2013 and before the due date (including extensions) of your 2016 tax return (see instructions). If married filing jointly, include both spouses’ amounts in both columns. See instructions for an exception . . . . . . . . . . . . . 4
Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)
The credit cannot exceed the tax you owe
The Saver's Credit is nonrefundable, meaning it cannot reduce your tax liability below zero. Line 11 of Form 8880 requires you to enter the amount from the Credit Limit Worksheet found in the instructions, which calculates the maximum credit based on your actual tax liability. The final credit you claim is the smaller of the preliminary credit amount or this tax limitation. This ensures that the credit can only offset taxes you actually owe; it cannot generate a refund on its own. If your tentative credit exceeds the limitation from the Credit Limit Worksheet, the excess is lost. The limitation applies after the income-based rate has been applied to your eligible contributions. Taxpayers should consult the Credit Limit Worksheet instructions to determine the exact dollar amount of this cap, as it depends on total tax and other credits claimed on the return.
11 Limitation based on tax liability. Enter the amount from the Credit Limit Worksheet in the instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)
Being a student for even part of five months can disqualify you
The Saver's Credit requires taxpayers to meet a student status test. According to the IRS instructions for 2016, you are considered a student if 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 government agency during any part of 5 calendar months of the tax year. This means that even if you were only a student for a portion of five months - say, from August through December - you would be disqualified from claiming the credit, regardless of whether you made qualifying retirement contributions. The definition of a school includes technical, trade, and mechanical schools but excludes on-the-job training courses, correspondence schools, and schools offering courses only through the Internet. This student test applies in addition to the income limits: $61,500 for married couples filing jointly, $46,125 for heads of household, and $30,750 for all other taxpayers. If you meet the student definition for even part of five months, you cannot claim the Saver's Credit for that tax year.
You were a student if during any part of 5 calendar months of 2016 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.
Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)
This credit stacks on top of the separate IRA deduction
The Saver's Credit can be claimed in addition to any IRA deduction you may be eligible for. This means the two tax benefits work independently - you can reduce your taxable income through a traditional IRA deduction AND receive a tax credit through the Saver's Credit for the same contribution. The IRA deduction is claimed on Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32, while the Saver's Credit itself is calculated on Form 8880 and then entered on Form 1040, line 51; Form 1040A, line 34; or Form 1040NR, line 48. This stacking of benefits means that eligible taxpayers who contribute to traditional IRAs receive both an upfront deduction that lowers their taxable income and a separate credit that directly reduces their tax liability. The two provisions are calculated separately and do not reduce each other. The Saver's Credit income limits for 2016 are $61,500 for married couples filing jointly, $46,125 for heads of household, and $30,750 for all other taxpayers. Taxpayers whose adjusted gross income falls within these limits can claim both benefits for the same tax year, making retirement contributions particularly valuable for those who qualify.
This credit can be claimed in addition to any IRA deduction claimed on Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32.
Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Notice 2015-75 (IRS)
- Maximum AGI for the 50% credit rate, married taxpayers filing a joint return
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $36,500 to $37,000; the limitation under § 25B(b)(1)(B) is increased from $39,500 to $40,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $61,000 to $61,500.
- Maximum AGI for the 20% credit rate, married taxpayers filing a joint return
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $36,500 to $37,000; the limitation under § 25B(b)(1)(B) is increased from $39,500 to $40,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $61,000 to $61,500.
- Maximum AGI for the 10% credit rate, married taxpayers filing a joint return
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $36,500 to $37,000; the limitation under § 25B(b)(1)(B) is increased from $39,500 to $40,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $61,000 to $61,500.
- Maximum AGI for the 50% credit rate, taxpayers filing as head of household
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing as head of household is increased from $27,375 to $27,750; the limitation under § 25B(b)(1)(B) is increased from $29,625 to $30,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $45,750 to $46,125.
- Maximum AGI for the 20% credit rate, taxpayers filing as head of household
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing as head of household is increased from $27,375 to $27,750; the limitation under § 25B(b)(1)(B) is increased from $29,625 to $30,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $45,750 to $46,125.
- Maximum AGI for the 10% credit rate, taxpayers filing as head of household
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing as head of household is increased from $27,375 to $27,750; the limitation under § 25B(b)(1)(B) is increased from $29,625 to $30,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $45,750 to $46,125.
- Maximum AGI for the 50% credit rate, all other taxpayers
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers is increased from $18,250 to $18,500; the limitation under § 25B(b)(1)(B) is increased from $19,750 to $20,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $30,500 to $30,750.
- Maximum AGI for the 20% credit rate, all other taxpayers
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers is increased from $18,250 to $18,500; the limitation under § 25B(b)(1)(B) is increased from $19,750 to $20,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $30,500 to $30,750.
- Maximum AGI for the 10% credit rate, all other taxpayers
The adjusted gross income limitation under § 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers is increased from $18,250 to $18,500; the limitation under § 25B(b)(1)(B) is increased from $19,750 to $20,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $30,500 to $30,750.
United States Code (2016 edition), Title 26 Section 25B (Office of the Law Revision Counsel)
- Highest-tier applicable percentage
if the adjusted gross income of the tax- payer is not over $30,000, 50 percent,
- Middle-tier applicable percentage
if the adjusted gross income of the tax- payer is over $30,000 but not over $32,500, 20 percent,
- Lowest non-zero-tier applicable percentage
if the adjusted gross income of the tax- payer is over $32,500 but not over $50,000, 10 percent,
Form 8880 (2016), Credit for Qualified Retirement Savings Contributions (IRS)
- Maximum eligible contribution per person
In each column, enter the smaller of line 5 or $2,000