On the screen that says "Let's check if you're exempt from additional taxes," I see 3 questions:
Did you receive the withdrawal before December 31, 2020?
Did you, your spouse or dependents test positive for Covid-19?
Were you or anyone living in your household financially impacted by Covid-19?
After I answer all 3 questions, the screen says: "Great News! You are eligible for a Covid-19 exception..." I believe this is an exception to the 10% early withdrawal penalty.
My 1040 line 5b still says that the full $30,000 is taxable income in 2020, even though I repaid $10,000 and elected to spread the distribution out of 3 years.
