The IRS and Treasury are preparing regulations for the new Saver’s Match program, which will begin replacing the Saver’s Credit in 2027 and provide qualifying low- and moderate-income taxpayers with direct federal contributions to eligible retirement accounts.
By yourNEWS Media Newsroom
The Internal Revenue Service and Department of the Treasury are preparing proposed regulations for the Saver’s Match, a new federal retirement incentive that could provide eligible taxpayers with as much as $1,000 annually in government matching contributions beginning in 2028.
Designed for low- and moderate-income Americans, the program will generally replace the existing Saver’s Credit for taxable years beginning in 2027. The federal government will match as much as 50% of the first $2,000 an eligible taxpayer contributes to a qualifying retirement account.
That means a taxpayer who contributes at least $2,000 and otherwise meets the program’s requirements could receive the maximum $1,000 federal contribution. Payments will begin in 2028 and will be based on qualifying retirement contributions made during the 2027 tax year, the IRS said in an Aug. 7 statement.
The IRS and Treasury outlined elements of the anticipated regulations in a notice issued Friday, including which contributions will qualify and the income limits that will determine eligibility.
Four categories of retirement contributions are expected to qualify. They include contributions to traditional and Roth IRAs; contributions to Section 501(c)(18) plans; certain voluntary after-tax employee contributions to qualified retirement plans; and elective deferrals, including contributions made to Section 401(k) plans.
“Millions of low- and moderate-income Americans will have the opportunity to strengthen their retirement savings through the Saver’s Match program,” IRS Chief Executive Officer Frank J. Bisignano said.
“The Saver’s Match makes saving easier and more rewarding by providing a direct federal contribution to an eligible taxpayer’s retirement account. The notice is an important first step in implementing President [Donald] Trump’s Executive Order with respect to the Saver’s Match program,” Bisignano said.
The executive order Bisignano referenced, “Promoting Retirement-Savings Access for American Workers by Establishing TrumpIRA.gov,” was signed by President Donald Trump on April 30.
Trump wrote in the order that tens of millions of Americans lack access to employer-sponsored retirement plans and said small-business employees, independent contractors, self-employed workers and part-time employees face “unnecessary barriers to saving for retirement.”
The administration intends to make it possible for qualifying workers to receive up to $1,000 in matching retirement savings while also increasing public awareness of the Saver’s Match.
Trump’s order directed the Treasury secretary to establish the TrumpIRA.gov website by Jan. 1, 2027, as a resource for individuals seeking information about low-cost, high-quality individual retirement accounts.
The IRS said it expects the website to include financial institutions offering IRAs that are also willing to accept Saver’s Match contributions.
According to the website, approximately 41 million American workers between ages 18 and 65 do not have access to retirement plans provided through their employers.
The site also illustrates the potential long-term effect of combining an individual’s own savings with the federal match.
“A 25-year-old worker who saves about $165 per month and qualifies for a $1,000 annual Saver’s Match could retire with roughly $465,000 at age 65,” the website said.
Of that projected $465,000 total, nearly $155,000 would come from Saver’s Match contributions. The calculation assumes an annual investment return of 6%.
Eligibility will depend partly on age and income.
Taxpayers must be at least 18 years old during the applicable taxable year to qualify, according to the IRS and Treasury notice.
For 2027, single taxpayers with modified adjusted gross income of $35,500 or more will not qualify. The same $35,500 cutoff applies to married taxpayers filing separately.
For married couples filing jointly, the income threshold is $71,000. For heads of household, the maximum qualifying income is $53,250.
Beginning with taxable years after 2027, those income limits will be adjusted for inflation.
Taxpayers seeking the federal match will be required to claim it using a separate Form 8880-A.
Although the Saver’s Match is set to replace the current Saver’s Credit in most circumstances, the existing credit will remain available for certain contributions made to Achieving a Better Life Experience accounts.
The two programs also operate differently. Saver’s Credit provides a nonrefundable tax credit, while Saver’s Match directs federal money into an eligible taxpayer’s retirement account.
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