SECURE 2.0 Upgrades Saver’s Credit to a Valuable Match

by Prof. Robert Bloink and Prof. William H. Byrnes

The SECURE Act 2.0 made significant changes to the retirement planning landscape. While some key changes became effective immediately, others are being implemented in stages. The current saver’s credit, which provides a nonrefundable tax credit for certain lower-income taxpayers who make contributions to their retirement plans, has always been valuable. However, it’s value has also always been limited for taxpayers with little to no tax liability—due to the nonrefundable nature of the credit. Once the enhanced saver’s match program becomes effective, however, all taxpayers who satisfy the income requirements will be entitled to the benefit of government-sponsored retirement contributions. For many lower-income taxpayers, those direct retirement savings could be a game changer going forward.

SECURE 2.0 Changes