Saving for retirement can be difficult when you don't make a lot of money. But fortunately, there's a special provision in the tax code designed specifically to help lower- and middle-income Americans build a bigger nest egg. It's called the Saver's Credit, and it could provide you with up to a $1,000 tax credit as a single person or up to $2,000 as a married couple. Since tax credits reduce your tax bill on a dollar-for-dollar basis, that's basically like getting $1,000 to $2,000 in free money. Here's how it works. Image Source: Getty Images. How to score up to $2,000 in free retirement money The Saver's Credit is a tax credit that takes money off your tax bill when you make retirement contributions to eligible accounts such as an IRA or workplace 401(k). Specifically, you'll get back between 10% and 50% of the first $2,000 in contributions you make -- and that includes money taken directly out of your paycheck and put into a workplace plan. The table below show how large of a percentage of your contribution you can expect as a credit for the 2020 tax year, based on your adjusted gross income (AGI) and filing status. These numbers are indexed to inflation, and the income thresholds will be a little higher in 2021. You'll receive a credit equaling If you're single or married filing separately and your AGI is: If you file as head of household and your AGI is: If you're married filing jointly and your AGI is: 50% of your contribution $0 to $19,500 $0 to $29,250 $0 to $39,000 20% of your contribution $19,501 to $21,250 $29,251 to $31,875 $39,001 to $42,500 10% of your contribution $21,251 to $32,500 $31,876 to $48,750 $42,501 to $65,000 Data source: IRS. So, what does this mean for you? Suppose you're a married joint filer with an adjusted gross income of $38,000. You and your spouse would be entitled to a credit equaling 50% of the first $4,000 in contributions ($2,000 for each of you). If you contribute a combined $4,000, you'd get a tax credit of $2,000. Of course, if your income was a little higher, your credit would be lower. If you had an AGI of $50,000 and contributed $4,000 as a married couple, you'd receive a credit valued at 10% of your contribution, or $400. While this isn't quite as generous, it's still free cash for retirement contributions that can help you build a more secure future. And tax credits are much more valuable than tax deductions. While a $2,000 deduction would only reduce your tax bill by up to $240 if you're in the 12% tax bracket, a tax credit provides a dollar-for-dollar reduction. If you had previously owed $5,000 in taxes and you got a $2,000 credit, you would now owe only $3,000. There are a few requirements to take advantage of the Saver's Credit, beyond just the income limits. For example, you can't be claimed as a dependent on someone else's tax return and must be at least 18 years old. You can't be a full-time student, either. But if you're eligible, there's no reason to pass up free money. So aim to contribute at least the $2,000 as a single person or $4,000 as a couple for the maximum help from Uncle Sam in growing your nest egg. 10 stocks we like better than WalmartWhen investing geniuses David and Tom Gardner have an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks Stock Advisor returns as of 2/1/20The Motley Fool has a disclosure policy.Source