US tax service sends notices about new retirement savings contribution — CNBC
The US Internal Revenue Service (IRS) has begun sending notices to certain taxpayers about possible eligibility for a new government contribution to retirement savings — Saver’s Match. The program will apply to the 2027 tax year and provide up to $1,000 per year for individual filers and up to $2,000 for married couples filing jointly.
As CNBC reports, the IRS sent CP321J notices to people who claimed the Saver’s Credit on their 2025 tax return or whose income for that year met the criteria for the new program. Saver’s Match is intended to replace this credit.
How the contribution will work
Taxpayers filing individually with a modified adjusted gross income of up to $20,500 per year will be eligible for the full contribution. For married couples filing jointly, the threshold will be $41,000. The government will add an amount equal to 50% of the taxpayer’s retirement contributions, but will count no more than $2,000 in contributions. The maximum contribution will be $1,000 per person.
A reduced contribution will be available to individual filers with income from $20,501 to $35,499, as well as married couples with joint income from $41,001 to $70,999. Other requirements include being at least 18 years old, having US tax resident status, not being a student or another taxpayer’s dependent, and making qualifying contributions to a retirement account.
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Claiming the payment and unresolved issues
The contribution will be available to those who save through employer plans such as 401(k)s, as well as through individual retirement accounts, or IRAs. Saver’s Match will be claimed using the new Form 8880-A when filing a 2027 tax return in 2028.
The current Saver’s Credit will remain in effect through the end of the 2026 tax year. It can also reach $1,000 for individual filers and $2,000 for married couples, but it is nonrefundable: the credit only reduces tax liability to zero and does not generate a refund.
The US Treasury Department and the IRS are still developing rules for how Saver’s Match will operate and are collecting comments until October 5 regarding potential difficulties. In particular, Roth IRA contributions will count in determining eligibility for the contribution, but these accounts themselves will not be able to receive it. Employer retirement plans and IRA providers are also not required to accept such government transfers directly.
