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Get your taxes done using TurboTax
You have until the due date of your 2020 return, May 17, 2021, to repay any portion of your covid distribution and have it count for tax year 2020. You are not required to repay the covid distributions, but you can. Be sure to enter any 1099-Rs you received before you file. You can file an extension which gives you an extension to file, but not to pay your tax bill. That still has to be done by 05/17/21.
If you need to take money out of your retirement account early due to COVID-19, you can do that penalty free in 2020. Those who qualify 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. @Caseyblue
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