Q. Will RMD reduce savers credit?
A. Yes, and may well eliminate it. So, yes, an RMD is treated as normal distribution from IRA which reduces savers credit.
First, any distribution, from any retirement plan, will effect the calculation of the savers credit.
You, or your spouse, must not have taken money out of a retirement account (including drawing a pension) in the last three years. See lines 4&5 on form 8880. https://www.irs.gov/pub/irs-pdf/f8880.pdf
In addition, the additional income from the RMD counts toward your AGI (line 11 of form 1040) and affects the calculation of the savers credit. See the table on Form 8880.
