Sat Sep 07 23:50:00 UTC 2024: ## IRS to Launch New Program Offering Taxpayer-Funded Retirement Savings Match

**Washington, D.C.** – The Internal Revenue Service (IRS) and Treasury Department are preparing to launch a new program, called the Saver’s Match, aimed at boosting retirement savings for low and moderate-income Americans. This program, set to launch in 2027, will replace the current Saver’s Credit and offer direct contributions of up to $1,000 annually to eligible individuals’ retirement accounts.

The Saver’s Match will provide direct financial support, rather than tax reductions, and is expected to be particularly beneficial for those with minimal or no tax liability. This direct contribution approach is expected to have a greater impact on retirement savings.

The IRS and Treasury are seeking public feedback on the program’s implementation, focusing on simplifying the claiming process and ensuring compatibility with various retirement plans. The agencies are also exploring ways to incentivize retirement plan participation, currently voluntary, to maximize the program’s reach.

Eligibility for the Saver’s Match will mirror the current Saver’s Credit, with income-based phase-outs. For single filers, the phase-out begins at $20,500 and ends at $35,500. For married couples filing jointly, the phase-out begins at $41,000 and ends at $71,000. These thresholds will adjust annually for inflation.

One significant change from the current Saver’s Credit is the exclusion of certain “nonresident aliens” from the Saver’s Match. The IRS is seeking public input on how to effectively implement this restriction.

Additionally, the program’s interaction with Roth retirement accounts is being examined. While contributions to Roth IRAs qualify for the match, the Saver’s Match funds must be deposited into a traditional, pre-tax account.

The IRS is also looking into potential issues with early withdrawal penalties for participants who may need to access their savings for emergencies.

The agencies are encouraging a wide range of stakeholders, including low to moderate-income taxpayers, IRA custodians, trustees, and retirement plan administrators, to provide feedback by November 4th. The public input will be used to refine eligibility criteria, the claiming process, and incentivize retirement plan participation.

Read More