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Level 2
October 12, 2020
Question

Can I file an amended 2019 return in order to spread 2019 extra 401k income over 3 past years?

  • October 12, 2020
  • 4 replies
  • 11 views
how do I amend return to spread 401k income over past years?

4 replies

Level 15
October 12, 2020

What?   You want to go back in time and spread a 2019 401k distribution over the past three years?  No, you cannot do that.  There is is provision in the CARES act for spreading out a 2019 distribution that you took out in 2020 for covid-19 related reasons that lets you spread it out over three years in the future.  Is that what you are asking about---were you confused by the three year thing and you thought you could do it retroactively?

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
yoyomomAuthor
Level 2
October 12, 2020

I could have made it up.  I was under a lot of stress when I filed my return.  I "remember seeing a question asking if I wanted to spread my income since it was a lot higher than it had ever been, but it would require that I have information from my 2018 and 2017 returns.  At the time, it sounded like a very difficult thing to do so I skipped it.  I took a large withdrawal to pay off our house and buy a car in 2019.  This put my in a higher tax bracket and cost me an additional tax for federal and state amounting to almost $5,000.  I have always used the CD until 2019, when I used the internet version.  I cannot backtrack and find this choice again.  Thank you for the help.

October 12, 2020

can you cite an authority for this?   Never heard of this. Maybe someone is pitching you a scam. 

Critter-3
Level 15
October 12, 2020

There is is provision in the CARES act for spreading out a 2020 distribution that you took out in 2020 for covid-19 related reasons that lets you spread it out over three years in the future. 

 

IF  this distribution qualifies as a Coronavirus-Related Distribution (CRD)  you have the option to spread the taxable amount of the distribution equally over 3 years.    The amount included each year will be taxed as ordinary income at your marginal tax rate for that year which can only be determined by taking into account your entire tax situation.  You also have the option to repay some or all of the distribution within 3 years of the date of the distribution to avoid taxation entirely on the amount repaid.  Since this is a CRD, there is no early-distribution penalty.

 

CRDs will be reported on the yet-to-be-released 2020 Form 8915-E.