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brandonaldridge8
New Member

I contribute to a 401K Retirement Plan, Why can't I get the Retirement Savings Contribution Credit?

I have met all the qualifications for the Retirement Savings Contribution Credit. Why does it say I am not qualified?
2 Replies
dmertz
Level 15

I contribute to a 401K Retirement Plan, Why can't I get the Retirement Savings Contribution Credit?

Often it's because one has no income tax liability before applying this credit.  This credit is a nonrefundable credit, so it can't be used to reduce your income tax liability below zero.  It cannot be used to reduce other taxes such as self-employment tax or penalties on early distributions from retirement plans.

MaryM428
Level 10

I contribute to a 401K Retirement Plan, Why can't I get the Retirement Savings Contribution Credit?

You're eligible for the credit if you're:

  1. Age 18 or older,
  2. Not claimed as a dependent on another person’s return, and
  3. Not a student.

You were a student if during any part of 5 calendar months of the tax year you:

  • Were enrolled as a full-time student at a school, or
  • Took a full-time, on-farm training course given by a school or a state, county, or local government agency.

A school includes technical, trade, and mechanical schools. It does not include on-the-job training courses, correspondence schools, or schools offering courses only through the Internet.

Here is theIRS page for the Retirement Savings Credit

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