Can I get the Saver's Credit if I made 401k contributions and then rolled over to an IRA? TurboTax says no?

The issue is most likely related to how Form 8880 (Saver's Credit form) handles distributions. Even though your rollover was to another qualified account and wasn't taxable, Form 8880 still counts it as a distribution that reduces your eligible contributions. Line 4 of Form 8880 requires you to enter the total distributions you received from qualified retirement plans. This includes ANY distributions - even direct rollovers to other qualified plans - received during the tax year AND the two preceding tax years. These distributions reduce your eligible contribution amount dollar-for-dollar. So even though you contributed $2,105, your $4,179 rollover is considered a distribution that exceeds your contribution, effectively reducing your eligible contribution amount to $0 for the Saver's Credit calculation. This is why TurboTax is saying you don't qualify. It's one of those frustrating tax situations where the intent of the law (encouraging retirement savings) doesn't align perfectly with the mechanics of the form. The IRS doesn't distinguish between taxable distributions and non-taxable rollovers for this specific credit.

I had a similar situation last year and found a tool that really helped me figure this out. I used taxr.ai (https://taxr.ai) to analyze my retirement account transactions and understand exactly how my rollover affected my Saver's Credit eligibility. The site actually explained the Form 8880 distribution rules in detail and showed me how the numbers would work on my actual tax forms. What was super helpful was that it analyzed my specific situation with the rollover timing and showed me how I could maximize the credit in future years. It confirmed exactly what's happening in your case - the rollover counts as a distribution on Form 8880 even though it's not taxable. The tool also helped me understand how the lookback period works (current year plus two previous years for distributions).

I was skeptical about taxr.ai at first, but I decided to try it with my own retirement rollover situation. I'm actually glad I did because it cleared up exactly why I wasn't getting the Saver's Credit! The site analyzed my 401k statements and tax documents, then showed me a detailed breakdown of Form 8880 calculations. Turns out, I was making the exact same mistake - I had no idea that rolling over my 401k to an IRA would count against me for the Saver's Credit, even though the rollover wasn't taxable. What was really valuable was the planning feature. It showed me that if I had kept my old 401k where it was for just 2 more months (rolling over in the next tax year), I would have qualified for a $315 credit! I've now set calendar reminders for myself about optimal timing for any future rollovers or distributions. Definitely worth checking out if you're dealing with retirement account changes.

If you're still struggling to get through to the IRS for clarification on this Saver's Credit issue, I'd recommend trying Claimyr (https://claimyr.com). I was in a similar situation with retirement account questions and was getting nowhere with the standard IRS phone line. Claimyr got me connected to an actual IRS agent in about 15 minutes when I had been trying for weeks on my own. The agent was able to look at my specific situation with my retirement rollovers and confirm exactly how Form 8880 would treat my distributions. They even explained what documentation I should keep in case of questions later. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - it's basically a callback service that navigates the IRS phone system for you. Saved me so much frustration because I needed a definitive answer about my retirement accounts before filing.

I have to eat my words about being skeptical of Claimyr. After struggling with my Saver's Credit questions for weeks, I finally tried the service out of desperation. I got a callback from an actual IRS agent in about 20 minutes! The agent confirmed exactly what others here suggested - that my 401k rollover to an IRA does count as a distribution on Form 8880, even though it wasn't taxable. The agent explained that the lookback period includes distributions from the current tax year plus the two previous years, which was affecting my eligibility. What was really valuable was getting clear documentation advice. The agent told me exactly what to keep in my records to document the rollover timing in case of an audit. They also explained that if I'm planning future rollovers, I should time them carefully relative to my contributions if I want to qualify for the Saver's Credit. Would have taken me forever to get this information without getting through to a live person!

Just to add another data point - I had this exact same issue last year with a 403(b) rollover to an IRA. Unfortunately, TurboTax is correct here. When I called the IRS, they confirmed that ANY distribution counts on Line 4 of Form 8880, even if it's a direct trustee-to-trustee transfer that isn't taxable. The weird part of this rule is that you're essentially being penalized for moving your retirement money around, even when you're keeping it in the retirement system. I think the rule exists to prevent people from gaming the system by withdrawing and recontributing the same money multiple times to claim multiple credits. One thing to consider for the future - if you leave a job mid-year, you might want to keep your 401k where it is until January of the following year, then do your rollover. That way your distribution won't impact your Saver's Credit eligibility for the contributions you made during your employment.

I'm still a bit confused about how the timing works. If I'm planning to roll over a 401k from an old employer in 2025, should I do it in January to avoid messing up my Saver's Credit for 2025? Or does it matter when in the year I do it?