My income is less than $18,000 a year and I contributed $5,500 to my Roth IRA but my retirement savings contribution credit is only $488. Why isn't it 50% of $2000?
02446
1 Best answer
Hal_Al
Level 15
Jun 6, 2019 4:05:53 AM
The retirement savings contribution credit is a non refundable credit. It can only be used to reduce your tax to zero.
Since your calculated tax was only $488, you only got $488 of the potential $1000.
2 Replies
Hal_Al
Level 15
Jun 6, 2019 4:05:53 AM
The retirement savings contribution credit is a non refundable credit. It can only be used to reduce your tax to zero.
Since your calculated tax was only $488, you only got $488 of the potential $1000.
dmertz
Level 15
Jun 6, 2019 4:05:55 AM
Hal_Al is referring to *income* taxes. This tax credit cannot be used to reduce other taxes such as self-employment taxes or retirement early-distribution penalties.