Solved: On the deduction for credit if you have contributed to a retirement plan - I thought I would multiply the amount of $2000 x .5 which would equal $1,000. Is this incorrect
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dianemge2
New Member

On the deduction for credit if you have contributed to a retirement plan - I thought I would multiply the amount of $2000 x .5 which would equal $1,000. Is this incorrect

 
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dmertz
Level 15

On the deduction for credit if you have contributed to a retirement plan - I thought I would multiply the amount of $2000 x .5 which would equal $1,000. Is this incorrect

TurboTax automatically calculates the correct amount of Retirement Savings Contributions Credit based on your (presumably correct) inputs.  If you made at least $2,000 of retirement contributions (after subtracting any retirement-account distributions you made after 2013) and your AGI is low enough to place you in the 50% credit range, you would receive a $1,000 credit.  At higher levels of AGI the credit reduces to 20%, then 10%, and finally disappears altogether.

See IRS Pub 590-A regarding this credit:

https://www.irs.gov/publications/p590a/ch03.html

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dmertz
Level 15

On the deduction for credit if you have contributed to a retirement plan - I thought I would multiply the amount of $2000 x .5 which would equal $1,000. Is this incorrect

TurboTax automatically calculates the correct amount of Retirement Savings Contributions Credit based on your (presumably correct) inputs.  If you made at least $2,000 of retirement contributions (after subtracting any retirement-account distributions you made after 2013) and your AGI is low enough to place you in the 50% credit range, you would receive a $1,000 credit.  At higher levels of AGI the credit reduces to 20%, then 10%, and finally disappears altogether.

See IRS Pub 590-A regarding this credit:

https://www.irs.gov/publications/p590a/ch03.html

View solution in original post

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