IRS to Propose Retirement Regulations Impacting Millions of Taxpayers

The Internal Revenue Service (IRS) and the Department of the Treasury plan to propose regulations for a federal retirement savings incentive program, including eligibility criteria and income thresholds for qualifying for such benefits.

Aimed at low- and moderate-income taxpayers, the IRS Saver’s Match is a new federal program that seeks to promote retirement savings. In general, Saver’s Match will replace the existing Saver’s Credit program for taxable years beginning in 2027.

Under the program, the government will provide eligible taxpayers up to 50 percent of the first $2,000 in retirement savings contributions made to an employer-sponsored retirement plan or IRA.

The amount caps at $1,000 annually and will be paid to eligible individuals beginning in 2028 based on the retirement contributions they made in the 2027 tax year, the IRS said in an Aug. 7 statement.

In a notice issued on Friday, the IRS and the Treasury described regulations that they expect to be in the forthcoming proposed rules.

Four types of retirement savings contributions would qualify for Saver’s Match: contributions to a Roth or traditional IRA; contributions made to a section 501(c)(18) plan; certain voluntary, after-tax employee contributions to a qualified retirement plan; and elective deferrals, such as those made to a section 401(k) plan.

“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 in the statement.

“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.

Bisignano was referring to the “Promoting Retirement-Savings Access for American Workers by Establishing TrumpIRA.gov” executive order signed by Trump on April 30.

In the order, Trump said that tens of millions of Americans lack access to employer-sponsored retirement plans, with small-business workers, independent contractors, the self-employed, and part-time workers facing “unnecessary barriers to saving for retirement.”

The administration intends to ensure these people can obtain up to $1,000 in matching savings they make, Trump wrote, while calling for increased public awareness of the Saver’s Match program.

The order directed the Treasury Secretary to establish the TrumpIRA.gov website by Jan. 1, 2027, to provide individuals with information on low-cost, high-quality IRAs.

In its latest statement, the IRS said that the agency and the Treasury anticipate TrumpIRA.gov will list financial institutions that offer IRAs and accept Saver’s Match contributions.

According to the TrumpIRA.gov website, roughly 41 million American workers aged 18–65 lack access to employer-provided retirement plans.

“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.

Out of the $465,000, almost $155,000 is expected to come directly from the Saver’s Match contributions. The calculations assume an annual return of 6 percent.

Income Thresholds, Saver’s Credit

To qualify for the Saver’s Match, an individual must be at least 18 years old during the taxable year, according to the IRS and Treasury notice.

For 2027, single filers with a modified adjusted gross income of $35,500 or more do not qualify for the Saver’s Match. The same limit applies to married people who file separately.

For married couples who file jointly, the threshold is $71,000, and for the household head, the maximum limit is $53,250.

For taxable years after 2027, these thresholds will be adjusted based on inflation. The Saver’s Match claim must be made through a separate Form 8880-A.

While Saver’s Match will replace the existing Saver’s Credit program, for certain contributions made to Achieving a Better Life Experience accounts, Saver’s Credit will continue to be available.

Unlike Saver’s Match, which is an amount directly paid to a person’s retirement account, Saver’s Credit offers a nonrefundable tax credit as an incentive.