Our joint inome for 2022 was about $49000. I did not get the tax savers credit after contributing to a 401k like I did in 2020. I did rollover $10000

Rollovers and Roth conversions do not reduce the credit.  Make sure that you have properly reported the traditional IRA distribution as having been converted to Roth.

The credit is a nonrefundable credit, so if you have no tax liability before considering this credit, you do not receive any credit.

Retirement distributions in the preceding two years and through the filing date of your tax return by either you or your spouse that were not rolled over reduce the amount of new contributions considered for the credit.

@dmertz 

I just checked my 1099-R summary that I filed with my return yesterday and indeed I have entered that my entire $10000 was converted to a Roth IRA.

So either you are wrong and this conversion affects the savers credit or there is  a bug in the TurboTax software ( and I have found 2 in the previous 3 years ).

Turbo Tax should have included form 8880 into my return and it did not.

It's unlikely that this feature of TurboTax has a problem.  I'm sure it has something to do with your entries.

I just now tested a joint tax return with $24,000 of wages in box 1 of my W-2, $2,000 with code D in box 12 and entered a Form 1099-R reporting a Roth conversion of $25,000, producing an AGI of $49,000.  When I go through the Retirement Savings Contributions Credit section and indicate that I am not a full-time student, that I cannot be claimed as a dependent and the neither I nor my spouse received any distributions that were not rolled over over or converted to Roth,  TurboTax produced the correct $200 credit on Form 8880.

I'm assuming that the $49,000 of income that you stated is your AGI and included the taxable amount of the Roth conversion.  It's your AGI that determines the credit ratio.

@dmertz 

Thanks for your response.  Yes the $49000 is my AGI, we contributed about $1500 to 401k, so I was expecting a credit of $150.  And I had a total tax owed of about $1800.  In addition of converting $10K to a Roth in 2022, I also converted $100K to a Roth in 2021,    I also checked my 2021 return to verify the 1099-R form showed a conversion to a Roth, and not an ordinary IRA withdrawl.  

I have to wait a couple of days before I try to amend the return ( because I just filed yesterday )and go through that section again to double check everything.  

If you don't mind, watch for my response in a couple of days.

Thanks again!

@dmertz so I started to amend my return and got to the point where I can check for the savers credit and this is what it says about why I don't qualify for the credit:

Why don't I qualify for the Retirement Savings Contribution Credit?

Agreed, and that is what TurboTax does.

Be aware that this credit can only be applied against income taxes and Form 1040 line 22 [I originally typed line 13] cannot be reduced below zero.  This credit cannot be applied against Other taxes such as penalties determined on Form 5329 or self-employment tax, the total of which is shown on Form 1040 line 23 [I originally typed line 14].  

@dmertz in your previous post you said " Form 1040 line 13 cannot be reduced below zero".  Line 13 on my form is "qualified business deduction" I assume you mean line 24 "total tax" and for me this is $1812.  And line 16 "tax" is $2298 before a foreign tax credit.

So clearly I had a tax liability and I should have got the credit.  Again here is the reason turbo tax provided for not getting the credit:

Why don't I qualify for the Retirement Savings Contribution Credit?

@dmertz I just got off the phone with turbo tax support and he said that I won't get the credit because I am getting a refund.  He confirmed that making the excess estimated pre-payments  cheated me out of the savers credit.  

So before I believe you had done a fake tax form entry as a test proving that the tax credit worked as expected for a roth conversion.  Could you enhance this test to make some estimated tax payments that signficantly exceed the tax liability to see if the saver's credit is denied?

Sorry, I was looking at the wrong year's Form 1040 for the line numbers.  I've corrected my previous post to indicate that line 22 of Form 1040 cannot be reduced below zero by this credit.

"... making the excess estimated pre-payments  cheated me out of the savers credit."

That's entirely incorrect.  The amount that you have withheld for income taxes or pay in estimated taxes has absolutely no bearing on the amount of Retirement Savings Contributions Credit that is applied to your income tax liability.  The credit is applied on Form 1040 line 20 and subtracted from income-tax liability on line 22.  Credits for tax withholding and estimated taxes do appear on your tax return until line 25.

It would seem that you have Other taxes on Form 1040 line 23 that is not permitted to be reduced by any nonrefundable credits.

@dmertz I agree with you 100% that what you say is how it should work.  

But I ask again can you change your test tax form to include large estimated tax payments to prove ( or disprove ) that the savers credit is still shown by turbo tax.  My guess is that it won't.

And I just now confirmed again that that's the way it does work.  Increasing the amount withheld for taxes and increasing estimated tax payments produces a corresponding increase in the tax refund.  Filing Single, I entered a W-2 with $20,000 in box 1, $20,000 in box 2 and $2000 in box 12 with code D.  I also entered a $100,000 Q1 estimated federal tax payment.  The Retirement Savings Contributions Credit reduced the otherwise $708 income tax liability to zero, resulting in a tax refund of $120,000.

Changing to Married Filing Jointly and $41,000 in box 1 of the W-2 results in an entire $1,000 credit being applied, reducing the income tax liability from $1,513 to $513 and a refund of $119,487.

@dmertz you said "It would seem that you have Other taxes on Form 1040 line 23 that is not permitted to be reduced by any nonrefundable credits."

FALSE

Here is more info from my form:

Line 11: $48836 ( AGI )

Line 12: $25900 ( standard deduction )

Line 15: $22936 ( taxable income )

Line 16: $2298 ( tax owed from tax tables )

Line 17: 0

Line 18: $2298

Line 19: 0

Line 20: $482   (foreign tax credit )

Line 21: $482

Line 22: $1816

Line 23: 0

Line 24: $1816  ( total tax )

Line 25a: $2404 ( tax paid on W2s )

Line 25d: $2404

Line 26: $5000  ( total estimated payments )

Line 33: $7404  ( Total Tax Payments )

Line 34: $5588 ( Refund amount )

At $48,450 in box 1 of the W-2 when Married filing Jointly (which produces an income tax liability of $2,298), each spouse's credit is equal to only 10% of the first $2,000 of retirement contributions.  That's a maximum of $200 of this credit per spouse.  Line 20 is showing more than $400, so it appears that there is some other credit on Schedule 3 as well (the foreign tax credit?).

With just $1,500 contributed to retirement, the maximum possible for this credit is $150 under these circumstances.

@dmertz Yes I have a foreign tax credit of $482, but that shouldn't affect the savers credit should it? Schedule 3 shows only the foreign tax credit, nothing for the retirement savings credit since turbo tax did not pull in form 8880,

The foreign tax credit should not affect the Retirement Savings Contributions Credit since you still have income tax liability.

I've added $482 of foreign tax credit to my test and I still see $150 of Retirement Savings Contributions Credit being applied for a $1,500 retirement contribution.

@dmertz Ok I found what is causing the credit to be denied.

As I told you earlier i converted 10k to a roth in 2022 and 100k in 2021.

When I go through the retirement savings credit web pages in turbo tax I entered these values on the pages where it asks, did you receive any distributions from a retirement plan and I entered 100K for 2021 and 10K for 2022, assuming that when I had entered in my 1099-R information where I said this was a Roth conversion, it would remember that here.   It does not.  If I delete the entry for the 2021 and 2022 retirement distributions then I get the savers credit as expected.

So in your test case you apparently have no retirement plan distributions entered under the retirement savings credit web pages.   It seems like turbo tax should be asking here again if these distributions were converted to a Roth and therefore does not affect the credit.   Or it should remember this info in this section after it is entered for the 1099-R page

@dmertz  OK i found out why my tax credit was being denied.

When you go through the web pages for the retirement savings credit, there are pages that ask you have you have taken any distributions.  As I told you earlier, I converted 10K to a Roth in 2022 and 100K to a Roth in 2021.

On a subsequent page in this section, I then entered that I had these 2 distributions in 2021 and 2022.  If I delete these entries then I get the savers credit as expected.  I was expecting that turbo tax would remember that these distributions were conversions to Roth since i entered that info when I entered my 1099-R form.

So am I not supposed to enter these distributions in this section or not?   Seems like turbo tax should remember that these were Roth conversions or ask the question in this section again.

I agree, TurboTax's guidance as to which distributions not to list is lacking.  Even in the CD/download version the Learn More provides "This list of items do not [sic] reduce your eligible retirement contributions" but does not say not to enter them.

Expecting TurboTax to remember in this section that you did a rollover, particularly a rollover in a prior year if that happened, is giving TurboTax too much credit.  I would not have considered entering rollovers because I'm familiar with the instructions for Form 8880 and why TurboTax is asking for distributions.  the IRS instructions explicitly indicate not to include rollovers.

@dmertz  Thanks so much for your many replies and patience through this.

So for other people reading this thread can we summarize this and close this off?

Do you agree that when going through the retirement savings credit section of turbo tax that you should not list any distributions that were conversions to Roth IRAs.

Correct.  Roth conversions are not to be entered anywhere in the Retirement Savings Contributions Credit section.