@shafer0219 wrote:
I actually did that but how will the IRS know it was due to COVID if you put it under other.
They won't - which is why this must be reported properly as a COVID-19 related distribution on line 1 of the new 8915-E form (that does not exist yet). You need to wait for that form.
Choosing "Another Reason" will put it on the 5329 form which is only half of reporting. The 5329 instructions say:
What’s New
Qualified disaster or coronavirus-related
distributions. The additional tax
on early distributions doesn't apply to
qualified disaster or coronavirus-related
distributions. See Form 8915-E for more
details.
CARES Act allowed retirement plan COVID-19 related distributions and that can be paid back over 3 years or the tax spread over 3 years - it also eliminated the 10% early distribution penalty.
That is reported on a new 8915-E form that is not yet available and there is no estimated release date since the form is still in the draft state at the IRS. There is no telling how long it will take the IRS to make the electronic form available. Typical it takes the IRS 2-4 weeks to release the electronic form specifications after the paper version is released. e-file providers must program from the electronic specifications.
The draft paper form is here:
https://www.irs.gov/pub/irs-dft/f8915e--dft.pdf
https://www.irs.gov/pub/irs-dft/i8915e--dft.pdf
Also to see if you qualify for a COVID-19 related distribution see:
https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-...
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
