Senator Ron Wyden (D-OR) has introduced legislation to expand the new Saver’s Match program before it takes effect in 2027. The bill would double the government’s matching contribution, increase income eligibility limits, and change the match to an after-tax contribution.
Saver’s Match under current law
The original Saver’s Match program, under IRC § 6433, was created by the SECURE 2.0 Act. It is slated to replace the existing nonrefundable saver’s credit for tax years beginning in 2027. The program provides a government matching contribution, structured as a refundable credit, that is deposited directly into a low- or middle-income taxpayer’s retirement account, such as an IRA or 401(k) plan.
Under current law, the government will match 50% of the first $2,000 a taxpayer contributes to a retirement account, for a maximum annual match of $1,000. The match phases out based on modified adjusted gross income (MAGI). For joint filers, the match begins to phase out at a MAGI of $41,000 and is unavailable for those with MAGI of $71,000 or more. For single filers, the match phaseout range is $20,500 to $35,500 MAGI; for head-of-household filers, the phaseout range is $30,750 to $53,250.
Bill would double match, expand eligibility
The Savers Match Enhancement Act, S. 5507, introduced by Senator Wyden, would enhance the program in several ways.
Notably, the bill would increase the matching rate from 50% to 100%, doubling the maximum potential match to $2,000 per person annually. It would also index the $2,000 maximum contribution eligible for the match to inflation, allowing it to keep pace with the cost of living.
In addition, the bill would substantially raise income eligibility thresholds. For joint filers, the phaseout for the match would begin at $85,000 of MAGI, more than double the current-law threshold. Joint filers with up to $115,000 of MAGI could take advantage of the match.
For single taxpayers, the phaseout would begin at $42,500 of MAGI, while for head-of-household filers, the phaseout would begin at $63,750.
The legislation would also change the character of the match to an after-tax Roth contribution. The match would not be taxable to the saver in the year of the contribution, and it and any associated earnings would be tax-free upon distribution.
The proposed changes would be effective for tax years beginning after December 31, 2026, aligning with the program’s original start date.
Wyden, who championed the original saver’s match program, framed the enhancement as a necessary step to support workers. “This bill would alleviate some of the financial burdens that working Americans face when planning for their retirement and ensure the earnings they are able to set aside for retirement savings will have the largest impact possible,” he said.
For more on the current post-2026 Saver’s Match for qualified contributions to retirement plans and IRAs, see Checkpoint’s Federal Tax Coordinator 2d ¶ A-4455.
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