@Caseyblue wrote:
Can first 1/3 repayment be made after filing return but before filing date ?
To avoid having to file an amended tax return, you will have to report on your tax return, that you repaid the money. The deadline in the case of a COVID distribution is 3 years (not 60 days, or by the filing deadline, which are the deadlines for certain other returned distributions).
As far as we know now, if you made a return of distribution any time in the 3 year window, that means having to go back and file amended tax returns (for 2020 if you paid the tax all at once, and possibly for multiple years if you chose the 3 year spread option). That's going to be quite messy. It's possible the IRS could create a form and process to deal with it on 2021 and 2022 returns, but a repayment within the 3 year deadline would always require recalculating the 2020 income tax.
Potentially this means you could report the distribution, claim you will repay the entire amount, and pay no tax. When the IRS comes around to assess tax because their computers don't show a repayment, you could just say "I didn't get to it yet but I have 3 years." I don't recommend it, but there is nothing in the law that says you couldn't do that, other than an auditor telling you to pay the tax now and amend later if you really did pay it back.
So I guess what I'm trying to say is, if you tell Turbotax that you made a partial repayment, and you file before you actually make the repayment, the only statutory deadline to actually make the repayment is the 3 years. To keep things simple and avoid letters from the IRS, making the actual repayment before the filing deadline is probably the sensible thing to do. Then if you make another partial repayment, you will have to file an amended 2020 return later.
