Retirement Savings Contribution Credit Not Working?

Forum|Forum|3 years ago
March 13, 2023
3 replies
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My daughter should qualify for this credit as she is - not a student, over 18, not a dependent, under the AGI limit (her taxable income is $25,540). She made regular 401K contributions in 2022 into her work's plan. She should be eligible for the retirement savings credit, but Turbotax is not calculating it. When you go to the deductions and credits section it does not give a spot to enter 401K contributions, only IRA or Roth. In the personal income section, she entered her W2 401K contributions from box 12 and checked the retirement plan in box 13. The description says that Turbotax will calculate this credit but it is not showing anywhere. Please help?

Employee

The ONLY place that 401k entry should have been made is from her W-2---no other place. Look at her Form 1040----do you see anything on line 20----from Schedule 3 line 8?

PREVIEW 1040

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

G

GeorgeM777

The issue could be that your daughter does not have a tax liability. The Retirement Savings Contribution Savers Credit is a non-refundable credit. Thus, if there is no tax due, TurboTax will not calculate the credit. In other words, without a tax liability, there is nothing for the credit to offset.

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SteamTrain

Employee

What's in line 11 of her form 1040?

"Taxable" income doesn't limit it, gross income...ie. AGI does.

So if line 11 of her 1040 is over 34,000 then she doesn't qualify from an AGI standpoint

See the 2022 table here:

Retirement Savings Contributions Savers Credit | Internal Revenue Service (irs.gov)

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Also, $$ entered in box 12 of a W-2 form....with a code "D" (401k contributions)...those $$ are automatically considered for use in the RSCC calculations...but other limitations may have eliminated it. You still must step thru the calculation section for the RSCC on the Deductions&Credits page.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*