Expanded Student Saver’s Tax Credit Act
Expanded Student Saver’s Tax Credit Act
Plain Language Summary
# Expanded Student Saver's Tax Credit Act (HR 2852) - Summary **What the Bill Does** This bill would allow full-time students to take advantage of federal tax credits that encourage people to save for retirement. Specifically, it would let students claim the "Saver's Credit" (a tax break worth up to $1,000 per person, or $2,000 for married couples) through 2026 when they contribute money to retirement accounts like IRAs. Beginning in 2027, students would also be eligible for the "Saver's Match," a newer program where the government matches retirement contributions directly into accounts. Currently, full-time students are excluded from both programs. **Who It Affects and Current Status** This bill primarily affects full-time college and university students who are saving money for retirement.
It could help younger savers build retirement savings while still in school. The bill is currently in committee, meaning it has been introduced in the House but has not yet been voted on by the full Congress. It was sponsored by Democratic Representative Julie Johnson of Texas.
CRS Official Summary
Expanded Student Saver's Tax Credit Act This bill allows full-time students to qualify for the federal Retirement Savings Contribution Tax Credit (commonly known as the Saver’s Credit) through 2026 and the federal Saver’s Match beginning in 2027.As background, an eligible individual may claim the nonrefundable Saver’s Credit for a percentage of contributions made to a qualified retirement account (e.g., individual retirement account or employer-sponsored retirement account). The maximum Saver’s Credit amount allowed is $1,000 (or $2,000 for married joint filers). Under current law, the Saver’s Credit will be replaced by the Saver’s Match in 2027. Under the Saver's Match, a matching contribution of up to $1,000 (or $2,000 for married joint filers) may be deposited into an individual’s qualified retirement account. Full-time students are currently not eligible for the Saver’s Credit or Saver’s Match. Under the bill, the definition of an eligible individual for purposes of the Saver’s Credit and the Saver’s Match is modified to include full-time students.
Latest Action
Referred to the House Committee on Ways and Means.