Contributions to your 401(k) plan are reported in Box 12 of your W-2 with a Code D. As long as you enter your W-2 as you see it, TurboTax will calculate the correct deduction amounts for the Saver's credit. Sometimes this is called the Credit for Qualified Retirement Savings Contribution or Retirement Credit. It’s a non-refundable tax credit which means it can’t reduce the amount of tax owed to less than zero.
Based on your income and filing status, you may claim a credit on your return for a percentage of the contributions you made to a qualified retirement plan. You qualify for the credit if you’re:
- 18 or older
- Not a full-time student
- Not claimed as a dependent on someone else’s return
In 2020 your adjusted gross income (AGI) also can’t be more than:
- $65,000 if married filing jointly
- $48,750 if head of household (with qualifying person)
- $32,500 if single, married filing separately, or qualifying widow(er) with dependent child
The maximum credit is $1,000 ($2,000 for married taxpayers who are filing jointly), but is often less due to other deductions and credits and is limited by income. For more details on how to calculate your credit, see the IRS Saver's Credit page.
We’ll calculate this credit for you if you qualify and generate Form 8880.
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