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pierc127
New Member

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

 
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Accepted Solutions
re2boys
Level 9

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

The maximum amount of retirement plan contributions  that can be used in calculating the credit is $2000 (see line 6 of form 8880) https://www.irs.gov/pub/irs-pdf/f8880.pdf

10% of $2000 is $200.

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10 Replies
re2boys
Level 9

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

The maximum amount of retirement plan contributions  that can be used in calculating the credit is $2000 (see line 6 of form 8880) https://www.irs.gov/pub/irs-pdf/f8880.pdf

10% of $2000 is $200.

Ashby
New Member

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?


Amount of the credit
The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA or ABLE account contributions depending on your adjusted gross income (reported on your Form 1040 series return). The maximum credit amount is $2,000 ($4,000 if married filing jointly)
SweetieJean
Level 15

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

The maximum credit amount is $2,000 ($4,000 if married filing jointly).
<a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-save...>
dmertz
Level 15

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

The maximum possible credit per individual is 50% of the first $2,000 = $1,000, not $2,000.

If your AGI puts you in the 10% range, your credit is 10% of $2,000 = $200, exactly as TurboTax has calculated on Form 8880.
SweetieJean
Level 15

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

So the link I cited above is incorrect?
Ashby
New Member

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

@dmertz So, I see exactly what you're saying on Form 8880. Seems like a bad explanation from IRS. I do not see a way that you could get a $2,000 or $4,000 credit.
dmertz
Level 15

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

Wow, now I see where everyone is getting the wrong information.  I didn't realize that the IRS website has it wrong.
Ashby
New Member

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

The Savers Credit is a 'non-refundable' credit. That means this credit can reduce the tax you owe to zero, but it can't provide you with a tax refund.

pierc127
New Member

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

But can you explain the math to me? Why is my credit $200 instead of $550? This is not a helpful answer so far.
Ashby
New Member

I made $22,000 and contributed $5,500 to my Roth IRA. I should get a Retirement Savings Contribution Credit 10% of %5,500 ($550). Why is it only showing as $200?

Your math is correct, but the credit will only show the amount that will take your tax liability to zero. So, if Line 11 on your Form 1040 is only $200, your credit will only show as $200.
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