Saver’s Credit Changes

Originally Published on 4/25/24

The SECURE Act 2.0 made significant changes to the current saver’s credit, which provides a nonrefundable tax credit for certain lower-income taxpayers who make contributions to their tax-preferred retirement plans. Starting in 2027, the existing saver’s credit will be replaced by a 50 percent matching contribution from the federal government (the match will be deposited into existing 401(k)s and IRAs). That matching contribution will be limited to $2,000 and will also be subject to phase out based on income levels similar to those that apply to determine qualification for the existing tax credit.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about the SECURE Act 2.0’s changes to the saver’s credit.

Below is a summary of the debate that ensued between the two professors.