I had about $1000 last year in earned income (wages from a training session at the IRS that didn't pan out.) I put the money in my traditional IRA account, and I also wanted to take the Tax Saver's Credit. Turbo Tax says I can't, although I meet the income thresholds. (It would be a 50%, or $500 credit -- but they say its zero.)
Is it because I received $1100 from an old pension fund in 2013? Is that properly subtracted from my IRA contribution when calculating the credit? I understand the math and the form (and the instructions' terminology -- sort of). But I'm curious about the "why." Doesn't this discourage low-income retirees who take part-time jobs from saving more for retirement -- or does Congress/the IRS think that if you have any pension income, you don't need to save any more (ha)?
Is it because I received $1100 from an old pension fund in 2013? Is that properly subtracted from my IRA contribution when calculating the credit? I understand the math and the form (and the instructions' terminology -- sort of). But I'm curious about the "why." Doesn't this discourage low-income retirees who take part-time jobs from saving more for retirement -- or does Congress/the IRS think that if you have any pension income, you don't need to save any more (ha)?