Can someone tell me why all of a sudden turbo tax wont let me file free edition because i now have a 401k checked on my w2?

If you want to file for free, you have to remove the retirement saver's credit.  In order to do that, you have to state that you are a full-time student.  This will remove the credit and not force you to upgrade to TurboTax Deluxe.  This will not have an effect on any other part of your income tax return.  

TurboTax Free Edition is an online-only product that supports simple tax returns that can be filed on Form 1040 without any attached schedules.

Simple tax situations covered in TurboTax Free Edition:

• • W-2 income
  • Unemployment income
  • Limited interest and dividend income reported on a 1099-INT or 1099-DIV
  • Claiming the standard deduction
  • Earned Income Tax Credit (EIC)
  • Child tax credits

Situations not covered in TurboTax Free Edition include:

• Itemized deductions
• Business or 1099-MISC income
• Stock sales
• Rental property income
• Credits, deductions, and income reported on schedules 1–3, such as the Student Loan Interest Deduction