Hello.
I can't speak to 401ks as they may have separate rules (vs an IRA).
You should speak to your plan administrator.
As to an IRA withdrawal, the 8915-E offers you the option to split your gross proceeds (whatever you took from the IRA) into 3 parts.
If you elect to do that, 1/3rd of the gross withdrawal becomes income on the 2020 return.
The 2nd 1/3rd will be 2021 income and the final 1/3rd will be 2022 income.
Obviously, if you split the gross into three parts, this year's taxes will be lower than if you didn't split.
And just like any tax return, if you withheld more in total than your calculated taxes due in total, you will get a refund.
One last thing.
As noted above, the 8915-E allows you to split the proceeds into thirds.
It also allows you to qualify all or part of the withdrawal as a loan allowing for a full or partial repayment of that loan.
Your loan repayment reduces the 1/3rd - potentially to $0.
Here's a very simplified example.
I took an IRA withdrawal of 10,000.
$2,000 of that went to the IRS for taxes.
$8,000 went into my bank account.
I became unemployed due to COVID so I qualify for the hardship.
I choose to split the withdrawal ($3,333)
I realized that I didn't need the full amount and subsequently repaid $3,500 to my IRA.
Because I repaid more than the 1/3rd, this year's income from this becomes $0.
In this very simplified example, I get the $2,000 I paid in taxes back as a refund.
I hope that helps.
