Expanded Student Saver’s Tax Credit Act
Expanded Student Saver’s Tax Credit Act broadens who can receive two federal retirement-saving incentives—the Saver’s Credit (Section 25B) and the Saver’s Match (Section 6433). The bill removes the previous requirement that the beneficiary be a full-time student and instead allows the credit or match for any individual who is claimed as a dependent by another taxpayer under Section 151 for the tax year that begins in the calendar year of that individual's tax year. In practical terms, dependents (often students) who are listed on someone else’s tax return could become eligible for these retirement-saving benefits. The Saver’s Credit would apply to contributions made after enactment, while the Saver’s Match would take effect as if it were included in the SECURE 2.0 Act of 2022.
Key Points
- 1Expands Saver’s Credit eligibility: Now includes any individual for whom a deduction under Section 151 is allowed to another taxpayer for the year in which that individual’s tax year begins, removing the prior “full-time student” limitation.
- 2Expands Saver’s Match eligibility: Applies to the same broader group of individuals described above.
- 3Removes “full-time student” language: The headings and definitions are updated to reflect the broader dependent-based eligibility criterion.
- 4Specific effective dates: Saver’s Credit amendments apply to contributions made after enactment; Saver’s Match amendments take effect as if included in Section 103 of the SECURE 2.0 Act of 2022.
- 5Policy aim and potential cost: Intended to boost retirement saving among student dependents and other dependents, but could increase federal credits claimed and reduce revenue accordingly; dependent status (as opposed to filing own independent return) is central to eligibility.