The desktop program should be updated this evening; the form is scheduled to be released tomorrow. Once the program is updated, you will have the ability to apply the tax relief provisions from Form 8915-E to your 401K withdrawal. Those who qualify (it sounds like you do!) as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty. You qualify if:
- You, your spouse, or your dependent are diagnosed with COVID-19
- You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
- You had work hours reduced to COVID-19
- You’re unable to work due to child care closure or hour reduction
The distribution would be taxed over 2020, 2021, and 2022. You’ll have that time to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions, and if you pay back the amount within that time, you’ll be able to claim a refund on those taxes. Any amount over 100K will be treated as a normal (early) distribution if you are under the age of 59.5.
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