@taxgal428 wrote:
Hello
I took about $20K in 2020 under the Cares Act. I am currently calculating my taxes to determine if I want to claim the entire amount in one year or spread out the payments over the next three years. On my 2020 1099-R. Box 1 indicates $20,000 Box 2 indicates $20,000 and Box 4 Federal Withholding $2,000.00. My state does not tax on retirement distributions.
From my understanding I either can claim the entire amount of $20K in one tax year or spread it out over three years which would $6667 for tax year 2020, 2021 and 2022.
What about the Federal Withholding that was taken out and is listed in Box 4 on my 2020 1099-R form, is the Federal Withholding spread out over the three years as well or do I claim the entire $2000 of Federal Withholding on my 2020 taxes regardless if I claim the entire $20K or if I spread it out for tax years 2020, 2021 and 2022 AND if I chose to spread it out over the three years, I have either have to make estimated payments to cover the $6667 income for 2021 and $6667 income for 2022 or have more withholding taking out from my main W2 income?
Any help would be greatly appreciated.
Thank you in advance for your assistance.
The Federal box 4 withholding is applied to your 2020 1040 line 25b that will offset 2020 tax or add to yiur refund.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
