Saver's Credit
Saver's Tax Credit
Benefits & Compensation for Congregations

Per the IRS website, in 2020 a taxpayer with low to moderate income who is saving for retirement may be able to take a tax credit of up to $2,000, or up to $4,000 if married filing jointly. This Saver's Credit is in addition to the savings you realize when you reduce your taxable income by authorizing pre-income-tax salary-reduction contributions (also known as Elective contributions).

Why Would I Care?

A tax credit is one of the fastest ways to lower income taxes, since each dollar of credit reduces the federal income tax an employee owes by one dollar. 

How Much Might I Get?

If you are eligible, the result can be up to a maximum of $2,000 realized by a qualifying individual for the tax year if you contributed at least $4,000 to the UU Retirement Plan or another qualified plan. The credit rate is from 10 % to 50% and the amount of the credit is based on the voluntary contributions you make and your saver's credit rate, which depends on your income and your tax filing status.

Important Information from the IRS

The IRS Chart shows the maximum income level for those married filing jointly, head of household, and all other filers (single, married filing separately, or qualifying widow(er). See IRS Form 8880 (PDF) to determine your credit rate.  The IRS has included information about the Saver's Credit in the instructions for Form 1040EX, but you cannot claim it on the EZ. You must file Form 1040, 1040A, or 1040NR and attach Form 8880 to that tax return.

Who is Eligible?

You may be eligible for the credit it you are making voluntary contributions to the UU Retirement Plan, or certain other qualified plans designated in the IRS information. You must be:

  • Age 18 or better
  • Not a full-time student and
  • Not claimed as a dependent on another person's return.
  • Not have AGI of more than the limits set in the IRS chart (link above)

Does Everyone Qualify?

The Saver's Credit is meant to provide those with low and moderate incomes with an incentive to save. The strict income limits and related details are included on the IRS form and chart links above.

  • Ministers' AGI does not include the amount designated as their clergy housing allowance, and thus, to their surprise, a minister may find that they are eligible for the Saver's Credit.


  • Your Elective contributions are typically due by the end of the calendar year to your retirement plan account in a qualifying plan like the UU Retirement Plan.
  • If you qualify and don't apply, you are leaving money on the table.
  • Dependents, full-time students, and people under age 18 are not eligible for the Saver's Credit.
  • Only voluntary contributions are considered. Employer's contributions cannot be claimed toward the Saver's Credit.
  • The Earned Income Credit (EIC) and the Savers Credit can be simultaneously claimed.
  • The UUA does not offer tax advice. The information provided here is summarized, and participants are urged to review the source of this information, which is the IRS website linked above.

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