You will need to report the distribution on your 2020 tax return, along with whatever taxes were withheld. If you wish to take advantage of the Covid19 disaster distribution rules which allow Covid distributions to be exempt from the 10% penalty for early distribution (for those who are not yet 59 1/2 yrs old) and to spread the distribution evenly over the next 3 years, rather than reporting the entire distribution on your 2020 return, then you will need to file form 8915E to make this election. You can also use this form to opt out of spreading the distribution out over 3 years and only exempt the 10% penalty. If you do not report the distribution you will most likely get a letter from IRS indicating that you failed to report all of your 2020 income, along with a bill for additional taxes plus interest and penalties.
