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posted Apr 27, 2023 9:35:25 PM

Repaying COVID Distribution in 2023 and amending 2020 and 2021 returns

Question about a COVID 401k distribution

 

I am a NYS (non-NYC) resident filing jointly with my wife, have 3 children and currently one elderly parent as deductions (2 elderly parents in 2020 and 2021 as one passed in Feb, 2022).

 

I took a $99,999 gross distribution from my current employer's 401k plan on 11/3/20 as part of the COVID distribution program. The 1099-R (2020) shows Taxable Amount (2a) of $98,550.93 and Boxes 5 and 9b show $1448.07. Distibution Code (Box 7) is 1.

 

I entered $32,850 income on Form 8915 for each of my 2020 and 2021 returns. I am going to pay the full amount back by June 15, 2023 from the sale of a second home in Florida my wife co-owns with her sister. I already filed for an extension of federal and NY state taxes. My understanding is I have 3 years from the date I withdrew the money which would be 11/3/23 but because that is after the 10/15/23 extension, I have to get it in before 10/15. It's probably a moot point I guess since I'm paying it back by June 15 unless doing so after 4/15 makes a difference.

 

A few questions:

 

1 - Do I pay back $99,999 or $98,550.93?

 

2 - I know I have to file 2 amended returns for 2020 and 2021 but how do I update the 2020 and 2021 8915's to say I paid back either $32,850 or 33,333? (sub-part to this question is which amount do I put)?

 

3 - Do I need to submit documentation I returned the money to the 401k or is it automatic from my 401k administrator (Merrill)? If so, what and where?

 

4- Can I use my old Turbo Tax software to update those returns from 2020 and 2021?

 

5 - My 2021 return began with my 2020 filed TurboTax file imported in (and 2022 will be the 2021 imported in). If I amend my 2020, would that affect anything else in my 2021 return that now I have to redo that entirely?

 

6 - When doing my 2022 return, do I import the original 2021 file or start a return importing the amended 2021?

 

7- Do I also need to amend my NYS tax returns for 2020 and 2021 as well and if so, what would get changed?

 

Any other suggestions or guidance?

 

Thanks!

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