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Retirement tax questions
One way to pay tax on 2/3 of the distribution with your 2020 tax return is to repay 1/3 of the distribution before the due date of your tax return, including extensions, and include the entire remaining 2/3 as income on your 2020 tax return.
Another way works only if the distribution is not subject to an early-distribution penalty without claiming it as a CRD. You would report half of the distribution as a CRD and choose to include this in income in equal parts on your 2020, 2021 and 2022 tax returns and report the other half as an ordinary distribution, including all of that portion in income on your 2020 tax return.
1/2 + 1/3 * 1/2 = 3/6 + 1/6 = 4/6 = 2/3
‎February 25, 2021
12:44 PM