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The SECURE 2.0 Act made several changes to the Saver’s Credit for low-income workers. Fortunately, the U.S. government has decided to replace it with the new Saver’s Match intended to launch in 2027.
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Saver’s Credit [Photo: TheStreet]
According to Hagen, the Saver’s Credit provides tax breaks for eligible single and couple workers. For single workers, they can save up to $1,000 from their tax bill if they contribute at least $2,000 to their retirement accounts from the 2022 tax year. On the other hand, married couples can save at least $2,000 from their tax bill if they contribute at least $4,000 to their retirement accounts.
READ ALSO: Expanded Child Tax Credit 2023: Biden Administration Calls To Reinstate Program
Difference between Saver’s Match and Saver’s Credit
According to Mengle, the U.S. federal government decided to discontinue the Saver’s Credit and replace it with the new Saver’s Match that will be launched in 2027. Unlike the Saver’s Credit which earns a tax break on a tax bill, the Saver’s Match will receive a matching contribution from the government and have it deposited into a retirement account.
The income threshold is still applicable which means that the matching contribution for single workers will be up to $1,000. On the other hand, the matching contribution for couple workers will be up to $2,000, $1,000 for each partner.
READ ALSO: Up To $7,000 Earned Income Tax Credit (EITC): What To Do To Receive Them
