One of the relief measures for Covid-19 is the option to spread the taxation of your retirement distribution (up to $100,000) over three years.
Please read this IRS document for more information.
If you do want to take advantage of this option and pay the taxes immediately, please follow these steps:
- Enter your form 1099-R normally.
- After entering your form 1099-R, click Continue until you reach the screen Do any of these situations apply to you?.
- Check the box which says I took out this money because of a qualified disaster (includes COVID-19).
- Click on the radio button Yes this was withdrawn due to COVID-19 and click Continue.
- Follow the interview until you arrive at the screen Was this a withdrawal due to COVID-19 or a Qualified Disaster Distribution?
- Click on the radio button Yes this was withdrawn due to COVID-19 and click Continue
- Follow the interview until you arrive at the screen Does [name] want to pay all the tax this year?
- Check the box Pay tax on entire IRA, SEP or Roth IRA distribution in 2020
- Click Continue and the whole distribution is taxed in 2020.
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