If I am self employed and contributed $10,000 to my SEP IRA, this should be 100% deductible, but Turbotax is saying I only get a $200 credit; is this a mistake?

[ericgzentner]

My financial advisor tells me a SEP IRA contribution is 100% deductible, so I'm confused about why Turbotax is saying I only get a $200 credit.

[dmertz · Accepted solution]

The deduction for the SEP contribution and the Retirement Savings Contributions Credit are two different things.  The deduction for the SEP contribution appears on Schedule 1 line 16 and is reducing your AGI.  The $200 tax credit that you are seeing is calculated on Form 8880 and propagates to line 4 of Schedule 3.  Your AGI is such that this credit is 10% of the first $2,000 of your SEP contribution.