Don’t Forget the Saver’s Credit!

2022 news 2Ministers and spouses may be eligible to receive a credit of up to $1,000 ($2,000 if filing jointly) on federal taxes for 2021 contributions to workplace savings accounts. Eligible accounts include the Nazarene 403(b) Retirement Savings Plan.

Known as the Saver’s Credit (Retirement Savings Contribution Credit), the IRS rule serves as an incentive to mid- and low-income individuals to set aside money for retirement. Persons who are eligible must be: at least 18 years old in the year for which the claim is made; not a full-time student; and cannot be claimed as a dependent on another person’s tax return. Beyond this, adjusted gross income (AGI) cannot be more than:

  • $66,000 if a married joint filer;
  • $49,500 if a head of household filer; and
  • $33,000 for any other filing status.

The greater a filer’s income, the lower the amount of the credit. The accompanying chart shows how this works.

Note that a “credit” is not the same as a “deduction.” A tax deduction reduces the amount of income that is subject to taxes, but a credit reduces the actual tax bill dollar-for-dollar.

For ministers, housing allowance is not included in determining AGI, which may further increase the amount of the credit.

Only voluntary contributions are eligible for the tax credit, and the amount of contributions eligible may be affected by distributions received from the account during the year. You’ll find Form 8880 and more details here at

Even if you cannot take advantage of this credit for the 2021 tax year, now is a good time to start investing or to increase the amount of contributions to your Nazarene 403(b) Retirement Savings Plan account. To enroll, phone Pensions and Benefits USA at 888-888-4656 or email

Credit Rate Married Filing Jointly Head of Household All Other Filers*
50% of your contribution AGI not more than $39,500 AGI not more than $29,625 AGI not more than $19,750
20% of your contribution $39,501 to $43,000 $29,626 to $32,250 $19,751 to $21,500
10% of your contribution $43,001 to $66,000 $32,251 to $49,500 $21,501 to $33,000
0% of your contribution More than $66,000 More than $49,500 More than $33,000

*Single, married filing separately, or qualifying widow(er)