I had a 401(k) distribution from a former employer and input the 1099-R in TurboTax. TurboTax automatically input the amount in the Savers Credit calculation where it says to enter any 401(k) distribution. Then it calculated a Savers Credit for me. I do not understand- I get a penalty for taking the withdrawal since I am too young to take it, but then I get an ever bigger Savers Credit. Does TurboTax have a bug that is trying to give me this credit, or is the government trying to incentivize people to take money out of their 401(k)?
