Can I include my Texas state sponsored pension plan (deducted before tax), towards the Savers Credit? The contributions are also deducted from my Wages (box 1) on my W2.

[migearellano]

My W-2 does not specify on 12a or 14 the amount of my contributions towards the pension plan, but I calculated that my contributions were deducted on Box 1 of the W-2 and nowhere else.

[ThomasM125 · Accepted solution]

You may be able to include your state sponsored pension plan contributions towards the savers credit, assuming you met the other requirements such as the limit on your income and the amount of pension plan distributions you received during the year.

The problem is in order for TurboTax or the IRS to determine that you made pension plan contributions you would likely need to have that listed as such in box 12 of your W-2 form, using code D through H. The best course of action would be to get your employer to furnish you with a corrected W-2 form.

You may be able to use the Retirement Plan and Social Security section in TurboTax, under Deductions and Credits, and then Retirement Savings and Contribution Credit to enter your pension contribution. There is a screen there called Let us know if you made additional contributions to retirement accounts where you could enter your pension plan deferral as an after-tax contribution. That way it would be used to see if you qualify for a savers credit without entering a deductible pension plan contribution. You may not be able to enter that section without first entering a pension plan contribution though.

A possible work-around solution would be to enter the proper code and pension plan contribution amount in box 12 of your W-2 form entry to enable TurboTax to allow you to answer the questions regarding your saver's credit. You will see that after you enter your W-2 form in TurboTax.  You can enter the pension plan contribution again there, and then go back and remove the box 12 entries you made when you entered your W-2 form, then TurboTax will calculate the savers credit based on the entry you made in the savers credit section. It would not be wise to leave the box 12 entry in TurboTax as it would be misstating what is on the W-2 form.

You will still have the issue of the IRS possibly flagging your return for audit since the pension plan contribution is not listed on your W-2 form though, so the best course of action would be to get your employer to correct the W-2 form.

[migearellano]

Thanks! I will be sure to reach out to my employer to clarify.  Although, after doing some research after asking this question, I may have a pension retirement plan that is ineligible for the Savers Credit since from my understanding of the requirements (feel free to correct me) the contributions towards the pension plan are mandatory and one of the requirements of the Savers Credit is for the contributions to be voluntary. I should be able to get some answers with my employer tomorrow.