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.
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.
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)
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-savers-credit">https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit</a>
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.
@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.
Wow, now I see where everyone is getting the wrong information. I didn't realize that the IRS website has it wrong.
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.
But can you explain the math to me? Why is my credit $200 instead of $550? This is not a helpful answer so far.