Do employer pensions (with no employee contribution) or social security benefits reduce the Credit for Retirement Savings contributions.

Your pension distribution may affect the Savers Credit, if any of the following is true:

Did your distribution include any of the following:

• nontaxable rollover or transfer,
• conversion to a Roth IRA,
• loan from a qualified employer plan treated as a distribution,
• corrective distribution of excess contributions,
• return of contribution,
• dividends paid on stock by an employee stock ownership plan, or
• distributions from a plan to which you could not make a contribution?

The last item above is described here:

A Plan in Which Contributions Could Not be Made

In general, your qualified retirement savings contribution is not reduced by distributions you received from a plan in which you could not make a qualified retirement savings contribution.

Some examples of these plans include:

• A military retirement (other than the Thrift Savings Plan),
• An inherited IRA in which you could not or did not treat as your own, or
• An inherited qualified retirement plan, inherited 403(b) annuity, inherited governmental 457 plan, or inherited section 501(c)(18) plan, in which you could not or did not treat as your own.

The text above is from the IRS’s Interactive Tax Assistant.

You might walk through the assistant to see if you qualify.