I.R.S. Tells Some Taxpayers They Could Get Up to $2,000 a Year for Retirement

The Internal Revenue Service has begun mailing letters to taxpayers who may qualify for a new federal retirement match worth up to $1,000 a year for single filers and $2,000 for couples, CNBC reported on Tuesday.

The letters, known as CP321J notices, are going to people who claimed the Saver’s Credit on their 2025 tax returns, according to the IRS’s description of the notice. The match will replace that credit starting with the 2027 tax year and is limited to taxpayers whose 2025 income meets the program’s requirements.

Under the program’s terms, the government matches 50 percent of what a saver puts into an eligible retirement plan or an individual retirement account, on up to $2,000 in contributions a year. Single filers with modified adjusted gross income of $20,500 or less, and married couples filing jointly earning up to $41,000, qualify for the full match. A smaller match extends to singles earning up to $35,500 and couples earning up to $71,000, according to a Congressional Research Service summary.

The match is a product of SECURE 2.0, the retirement legislation Congress passed in 2022. It is aimed at lower- and moderate-income workers, a group that often has no easy way to save for retirement.

Of the 147.3 million American workers aged 18 to 64, 51.7 percent have no retirement plan at work, according to research from the Economic Innovation Group, a bipartisan public policy organization. In the private sector, 49.1 percent of workers lack access to an employer-provided plan. Even in government, 30.2 percent of workers have no access.

Just 37 percent of workers receive an employer contribution or match, with a median match of $3,000 a year.

Workers without a workplace plan can still receive the federal match by contributing to an individual retirement account. The IRS offered an example of how modest sums could grow.

“If you contribute $20 a month to a retirement account in 2027 ($240 total) and qualify for the full 50% match, the federal government adds $120 to your retirement account,” the agency said.

Contributing the same amount each year, and assuming an annual growth rate of 6 percent, would produce $28,500 in 30 years, according to the IRS example.