Does the Retirement Savings Contributions Credit (Saver's Credit) require premium tax filing software?

Tax professional here! You're right to be cautious about entering incorrect information. Marking yourself as a full-time student when you're not would indeed be fraudulent, so definitely don't do that. The Retirement Savings Contributions Credit (Saver's Credit) is a legitimate tax benefit for eligible retirement savers, but you're not required to claim every credit you qualify for. You have a few legal options: You could use a different tax filing software that doesn't upcharge for this form. Several free options include this credit without premium upgrades. If you're committed to using TurboTax, you could technically not report your retirement contributions, which would make you ineligible for the credit - but that's not advisable as it's still inaccurate reporting. The cleanest approach would be to file using IRS Free File or free fillable forms directly, which allows claiming all credits you qualify for without upgrade fees.

I went through this exact same thing last year! The tax software upcharges are ridiculous. I found taxr.ai (https://taxr.ai) and it was a lifesaver. It's basically an AI tax assistant that can look at your tax documents and tell you exactly what forms you need and what credits you qualify for without trying to upsell you on premium versions. For the Retirement Savings Credit specifically, it confirmed I qualified and told me exactly how to claim it without paying extra software fees. The tool does document analysis too, so it can check if you're missing anything or if there are other credits you should be claiming.

I was skeptical about taxr.ai at first but decided to try it after struggling with this exact Retirement Savings Credit issue. It was actually pretty amazing. I uploaded my W-2 and 401k contribution statement, and it immediately flagged that I qualified for the Saver's Credit. The best part was it directed me to a completely free filing option that included Form 8880 without any upgrade fees. Ended up getting the $120 credit (in my case) without paying a dime extra for premium software. It also found another credit I completely missed. Definitely worth checking out if you're in the same boat with TurboTax trying to upcharge you.

If you're struggling with figuring out tax credits and getting straight answers from the IRS, I'd recommend trying Claimyr (https://claimyr.com). I was super frustrated trying to get through to an actual human at the IRS about retirement credits and whether I needed to file certain forms. Was on hold for literally hours. With Claimyr, they got me through to an IRS agent in about 20 minutes instead of the 2+ hour wait I was experiencing before. The agent confirmed I could use Free File options for the Retirement Savings Credit without paying for premium software. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Saved me tons of time and frustration.

I was wrong about Claimyr! I tried it after posting my skeptical comment, and it actually worked exactly as advertised. Got through to an IRS agent in about 35 minutes (still faster than my previous attempts). The agent confirmed that not only could I use free filing options for the Retirement Savings Credit, but they also explained that I was calculating my credit amount incorrectly. Turns out I qualified for a $200 credit instead of the $80 I thought I was getting. That more than made up for any fees, and I didn't have to pay extra for premium tax software. Next time I have IRS questions, I'm definitely using this first instead of wasting days on hold.

Another option is to use the IRS Free File Fillable Forms. It's completely free no matter what credits you qualify for. The downside is that it's basically like filling out paper forms but on a computer - there's minimal guidance. But if you're fairly comfortable with taxes and just need to claim the Retirement Savings Credit, it might be worth looking into.

Just so you know, the Retirement Savings Contributions Credit phases out at higher income levels. If you're married filing jointly, it starts phasing out at $43,500 and completely disappears at $73,000 (for 2023 taxes). For singles, it phases out between $21,750-$36,500. Are you sure you actually qualify? If you're right on the edge, maybe double-check your AGI calculation. You might not actually qualify for the credit, which would solve the problem entirely.