DawnC
Expert Alumni

Retirement tax questions

Yes, TurboTax can handle the repayments.   When Form 8915-E is ready this weekend, you will be able to opt to have the distribution 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.  The $9K that you had withheld will be applied to your 2020 tax return, but the $45K distribution will be spread out over 3 years, and the software will work as intended once updated and Form 8915-E is included with your return.  

 

All COVID-19-related distributions must be treated consistently, either all reported fully in the tax year withdrawn or all reported ratably over three years. 

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