Is the Retirement Savings Contribution Credit worth paying for TurboTax Deluxe?

This sounds like TurboTax's system might be misidentifying something in your tax situation. The Retirement Savings Contribution Credit (also called the Saver's Credit) is a legitimate tax credit, but you can only claim it if you've actually made qualifying contributions to a retirement account like a 401(k), traditional or Roth IRA, or similar retirement plans. If you haven't contributed to any retirement accounts, then you wouldn't qualify for this credit. TurboTax sometimes shows potential credits you "might" qualify for to encourage upgrades, but in your case it seems misleading if you truly made no retirement contributions. You might want to double-check if there were any automatic contributions from your employer that you weren't aware of, but otherwise, I wouldn't pay for the upgrade based on this notification alone.

I had the exact same issue last year with TurboTax! I got excited seeing that I qualified for an extra $350 with the Retirement Savings Contribution Credit, but was confused because I wasn't actively contributing to retirement. After some digging around, I discovered I was enrolled in my company's automatic 401k (small percentage of each paycheck). I found a better solution than paying for TurboTax though - I used https://taxr.ai to analyze my tax documents and it identified that I was indeed eligible for the credit, plus it found a few other deductions TurboTax missed altogether. The service helped me understand exactly why I qualified instead of just telling me to upgrade.

Just wanted to follow up on my skeptical comment earlier. I decided to try taxr.ai after hitting the same upgrade wall with H&R Block this time. Turns out I actually did qualify for the Retirement Savings Contribution Credit! My employer had been making small automatic deductions that I hadn't noticed on my paystubs (they started mid-year after I hit 6 months with the company). The analysis broke down exactly why I qualified and showed me I could get the credit without paying for a premium tax service. I ended up using FreeTaxUSA with the information from the analysis and got my full refund including the credit. Definitely more helpful than just seeing a "upgrade to claim this" notification!

If you're having trouble getting clear answers about tax credits like this, you might want to call the IRS directly. I know it sounds painful (and it usually is), but I recently discovered a service called Claimyr (https://claimyr.com) that gets you through to an actual IRS agent usually within 15 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c I used it when TurboTax was telling me I qualified for education credits but then wanted me to upgrade. The IRS agent confirmed exactly what I qualified for and explained how to claim it without paying for premium software. Saved me the upgrade fee and got me more in my refund than TurboTax was showing.

I owe an apology for my skeptical comment. After trying to reach the IRS for 3 days straight and getting disconnected every time, I tried Claimyr out of desperation. Within 20 minutes I was talking to an actual IRS agent who confirmed that I qualified for the Retirement Savings Contribution Credit because of contributions that were showing on my W-2 that I hadn't realized were happening. The agent walked me through exactly how to claim it using the free filing options on the IRS website instead of paying for TurboTax. Saved me the upgrade fee and confirmed I was getting everything I qualified for. Sometimes being proven wrong is actually a good thing!

You can file for FREE using the IRS Free File program partners if your income is under $73,000. No need to pay TurboTax for basic credits like the Saver's Credit! Go to irs.gov/freefile and you can access truly free tax filing software that handles all these credits without charging you.

Check your W-2 box 12! I had the same thing happen and realized my employer had been putting a small amount into a retirement plan automatically. Look for codes like D, E or G in box 12 of your W-2. If there's a value there, you might actually qualify for the credit!