You can spread out your distribution if it is a qualified COVID distribution.

Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty.

You qualify if:

• You, your spouse, or your dependent are diagnosed with COVID-19
• You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
• You had work hours reduced to COVID-19
• You’re unable to work due to child care closure or hour reduction

The distribution would be 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.

Regarding repayment:

Repayment allowed

The act allows — but doesn’t require — a qualified individual to repay all or part of a coronavirus-related distribution. Repayments are treated as rollover contributions (the usual 60-day rollover deadline is deemed to be satisfied), so qualified individuals can repay their distributions to any employer-sponsored plan that accepts rollovers or to an IRA. If a qualified individual takes an in-service coronavirus-related distribution and then terminates employment, the individual can repay the distribution to the employer’s 401(k) plan if it accepts rollovers from former employees. If not, the individual can roll the distribution over to an IRA.

The total amount repaid cannot exceed the amount of the distribution (so the distribution can’t be repaid with interest). Qualified individuals have three years from the day after receiving a coronavirus-related distribution to repay it. If a qualified individual takes more than one coronavirus-related distribution, then each distribution has its own three-year repayment period.

Example. Rita contracts COVID-19 from her husband, Tom. She takes a $50,000 coronavirus-related distribution from her 401(k) plan on May 1, 2020. Rita has until May 2, 2023, to repay the distribution. She takes another $50,000 coronavirus-related distribution from the 401(k) plan on July 1, 2020. Rita has until July 2, 2023, to repay the second distribution.

Plans not required to accept repayment. IRS anticipates that most plans will accept repayment of coronavirus-related distributions. But Notice 2020-50 clarifies that plans aren’t required to accept repayment. For example, plans that don’t accept rollovers don’t have to start accepting these contributions.

Limits on repayment. Although most 2020 distributions can be coronavirus-related, Notice 2020-50 clarifies that repayment is allowed only for distributions that would be eligible rollover distributions regardless of the relief. For example, a qualified individual can treat periodic annuity payments in 2020 as coronavirus-related distributions, but the individual can’t repay those amounts since periodic payments aren’t eligible rollover distributions. Similarly, a coronavirus-related distribution paid to a qualified individual as a beneficiary of an employee can’t be repaid.

Repayment

Turbo tax seems to have an issue where if you took the distribution from a 401k (qualified plan) and then make the repayment to another plan type (IRA), it doesn't seem to recognize this as a rollover and the original distribution is still being taxed (1/3) as income in 2021.

I repaid my covid distribution in 2021 (after 2020 tax filing deadline) but am struggling to amend my 2020 taxes in turbo tax to show the rollover and recieve a refund of the taxes paid in 2020. Any suggestions?

After you enter your 1099-R in 2020, you should be asked if this was a Disaster Distribution (with a checkbox to indicate covid-related).

If you say NO, not a disaster distribution, you should then be asked what you did with the distribution (if this is not indicated by a Code G in Box 7) and you can indicate Rollover (screenshot). 

You should then come to a screen informing you that your Rollover is not taxable.

You can then transfer this Amended Return into 2021 TurboTax.

At the end of the Wages & Income section in 2021, when TurboTax asks if you took a disaster distribution, say No.

The Forms generated are 8915-E and 8915-F, so you can Delete These Forms if they appear in your 2021 return. 

@humphr35