What this line means
Your Saver’s Credit amount for each filer. You multiply your net contributions (line 6, capped at $2,000) by the credit rate from line 9. 1 The credit rate is 50%, 20%, or 10% depending on your filing status and adjusted gross income. A higher credit rate produces a larger credit. Each spouse calculates their own credit amount in separate columns, then the two amounts are combined on line 11.
Does this apply to you?
- You have net contributions greater than zero on line 6
- You determined your credit rate on line 9 based on your AGI and filing status
- You are calculating the dollar amount of your Saver’s Credit
Easy to overlook
The $2,000 cap per person means the maximum credit is $1,000 Even at the highest 50% rate, the credit tops out at $1,000 per person ($2,000 for a married couple filing jointly). 2 If you contributed $6,000 to your 401(k), only the first $2,000 of net contributions is used in this calculation. The remaining $4,000 still benefits your retirement but does not increase the credit. IRS Form 8880 instructions — line 10 credit amount
Your AGI determines the credit rate, and small income changes shift the percentage The credit rate drops from 50% to 20% to 10% to 0% at specific AGI thresholds based on filing status. 3 For 2025, a single filer with AGI up to $23,750 gets 50%, $23,751 to $25,750 gets 20%, $25,751 to $39,625 gets 10%, and above $39,625 gets 0%. A small increase in income can cut the credit rate dramatically. IRC Section 25B(a) — applicable percentage
Watch out for this
Using more than $2,000 in the multiplication. Line 10 multiplies line 9 (the credit rate) by the smaller of line 6 or $2,000. If you skip the $2,000 cap and multiply the rate by your full net contributions, you overstate the credit. The IRS will correct it and you will owe additional tax plus interest.
Footnotes
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IRS Form 8880 Instructions, Line 10. https://www.irs.gov/instructions/i8880 ↩
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IRS Form 8880 Instructions, Credit Amount. https://www.irs.gov/instructions/i8880 ↩
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IRC Section 25B(a), Applicable Percentage. https://www.law.cornell.edu/uscode/text/26/25B ↩