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I took a 401k distribution for COVID in 2020 and spread the income over 3 years. I repaid the entire amount in June 2021. How do I amend my 2020 return to get a refund

My distribution was for $30,000 but with spreading it over 3 years my 2020 return only showed $10,000 in income.  I repaid the $30,000 to my 401k in June. Can I amend my 2020 return to get a refund and will I still need to report form 8915 in 2021 and 2022

Retirement tax questions

You amend 2020 to show that it was all returned.   You will not need a 8915E in 2021 and 2022.

 

You should *wait* until your return has been processed and you receive your refund or conformation that any tax due has been paid. (If you file an amended return while you first return is being processed it can cause extended delays for both returns if two returns are in the system at the same time). In addition, if the IRS makes any change on your original return, you might end up having to amend the amendment – a sticky process that can take a year or more).

-- Then you can start the amend process.

It is suggested that it be mailed certified with return receipt (or other tracking service) to verify that the IRS receives it. That is the only proof of mailing that the IRS will accept.

-- Amended returns can be mailed or e-filed - allow 8-12 weeks - can take up to 16 weeks (4 months) for processing.  (Because of current COVID delays expect 6 months or more.)


See this TurboTax FAQ for help with amending:

https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed

You can check the status of your amended return here but allow 3 weeks after filing for it to show up:
https://www.irs.gov/filing/wheres-my-amended-return




**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.**

Retirement tax questions

if you amend showing the distribution paid back,

Form 8915-E will drop off your 2020 tax return.

You should mention this in your Part III explanation.

 

If you e-Filed 1040 you get one e-File of 1040-X, prior to Oct 15, 2021. Use it wisely.

Retirement tax questions

Basically, when you added the 1099-R before, you were asked what you did with the money, and you answered that you kept it, and that it was a COVID distribution.  When you prepare your return, you will change your answer to "I returned it before the filing deadline" or "I returned it within 60 days."

 

What I don't know is whether Turbotax is programmed to include the choice "I returned it within 3 years".  If that is a choice, pick it.  But if Turbotax only allows the other two choices (which are the only allowable options for non-COVID distributions) it will be ok to use them because they will lead to the correct result.  

Retirement tax questions

It really makes no difference what TurboTax "choice" is used.

Your Explanation on Form 1040-X will say what you did.