TurboTax data entry for Retirement Savings Contributions Credit is as follows:
- Federal Taxes
- Deductions & Credits
- Retirement and Investments, select Retirement Savings Contributions Credits
To qualify for the Retirement savings contributions credit, you must meet all four of these requirements:
- You are not a full-time student.
- Age 18 or older.
- No one else claims you as a dependent on their 2016 tax return.
- Your adjusted gross income (AGI) does not exceed:
- $61,500 if married filing jointly
- $46,125 if head of household
- $30,750 if single, married filing separately, or a qualified widow(er)
Which retirement plans qualify?
- Traditional or Roth IRA
- SEP or SIMPLE IRA
- 401(k), including designated Roth 401(k)
- 403(b), including designated Roth 403(b)
- Salary reduction SEP
- Governmental 457 plan
- Section 501(c)(18) plan
How is credit calculated?
We use information you've already entered in TurboTax to calculate the credit. Depending on your filing status and adjusted gross income (AGI), your credit will be a percentage of your 2016 retirement plan contributions. The credit applies to up to $2,000 of contributions for non-joint filers, and $4,000 for joint filers.
If your credit amount is bigger than what you owe in taxes, the taxes you owe are reduced to zero, and the rest of your credit is lost.
Example: If you owe $375 in taxes, and you receive a credit of $500, the tax you owe is reduced to zero, and the remaining $125 is lost. You won't receive a refund for the remaining $125.
