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Level 1
posted Jan 19, 2022 12:40:10 AM

CARES Act and Retirement Savings Contribution Credit

How does the "Did [you] receive any distributions from a retirement plan after 2018?" question affect the Saver's Credit question? Should "yes" be selected if the amount of the 401K was withdrawn, after the loss of a job in 2020?

0 4 454
4 Replies
Level 15
Jan 19, 2022 4:58:59 AM

YES ... if you had a distribution reported on a 1099-R and if you did not repay it or roll it into another 401K or IRA within 60 days then you answer YES to that question. 

Level 1
Jan 19, 2022 8:24:23 AM

Thank you. Got a 1099-R last year, but not this year. Opted to pay the interest and penalty on it the same year received (2020) taxes. Does that change anything?

Employee Tax Expert
Jan 19, 2022 1:41:29 PM

Receiving a 1099-R in 2020 and reporting it on your 2020 return would not disqualify you from receiving the Saver's Credit in 2021.

 

If you made contributions to a 401K in 2021, and the amount is shown on your W-2 in Box 12, TurboTax will pick this up when you enter your W-2 to see if you qualify for the credit. Remember the credit can only be applied to tax you owe.

 

Click this link for more info on the Saver's Credit.

Level 15
Jan 19, 2022 1:48:16 PM

The saver's credit has a look back function ... a 1099-R distribution in 2020 will indeed stop the 2021 form 8880 credit ... just READ the form.