Retirement Savings Contribution Credit

[Matt 126]

This is the first time my wife and I as married jointly filing tax payers are eligible for this credit. We made around 75k in 2024. Now, I contributed 1700 into a Roth 401k, my wife contributed 1500 into a traditional 401k. Why are we getting 400 back? Wouldnt we get 320 back instead since that is 10 percent of the amount we contributed? Turbotax is automatically allocating 400.00

[Matt 126]

This is the breakdown explanation from turbotax:

The credit amount you're eligible for is related to your adjusted gross income.

Your adjusted gross income is $74,297 . This qualifies you to claim 10% of your eligible retirement contributions as a credit. Since you contributed $4,000, you get a credit of $400.

The thing here is that I did not contribute 4k, but rather around 3.2k. I do not want to get in some trouble here….

[VolvoGirl]

Looks like you are getting 20% of the 2,000 limit.

What is the Savers Credit article

What Is the Savers Credit? - TurboTax Tax Tips & Videos

It says….

Depending on your adjusted gross income and tax filing status, you can claim the credit for 50%, 20% or 10% of the first $2,000 you contribute during the year to a retirement account. Therefore, the maximum credit amounts that can be claimed are $1,000, $400 or $200.

[Matt 126]

That shouldnt be the case since we are filing jointly in that 10 percent range.

50,001-$76,500

[VolvoGirl]

Check your W2s box 12 code D for the contributions.  

[Matt 126]

Those are the same amounts I mentioned which is less that 4k

[VolvoGirl]

Did you make any IRA contributions?   Or enter the 401K under Deductions & Credits?  Look at form 8880.  Then I don’t know.   Someone else will have to reply.   @dmertz ?

Before filing,  You can preview the 1040 or print the whole return

https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...

[Matt 126]

We do the 4 percent contributions from each pay that we get. One goes into a Roth 401k the other goes to a regular 401k

[Matt 126]

Cant view the 8880 form until I pay….

[VolvoGirl]

Sorry in the Online version you have to pay to see your return.   One thing you could do is delete the W2s and enter them again Manually.   That may reset it.   

[Matt 126]

I am so confused….. So in line 12A in the W2 on the income section those amounts are there am I supposed to be adding those same amounts in Traditional and Roth IRA Contributions for “Your Tax Breaks”

[VolvoGirl]

NO.  I just was saying you do not enter them again under IRA contributions.   Some people are entering them there too.  

[Matt 126]

That fixed it! Thank you! I hope turbotax fixes that in the future. My IRA deduction was also removed. 

[VolvoGirl]

Had you entered them there under IRA contributions?  Do you also make separate IRA contributions?  If you have 401K I don’t think you can make deductible IRA contributions.  I’m not clear how that works.   See  IRS Pub 590-A IRA Contributions

https://www.irs.gov/pub/irs-pdf/p590a.pdf

[Matt 126]

No, those were removed and now just a standard deduction is there… Thanks for your help!