@crickethead37
New tax-free contributions are not repayments. At this point, there are no changes to your tax return and you will still pay tax on the remaining 2/3 of the withdrawal on your 2021 and 2022 tax returns.
If you want to return your contributions, you will have to contact the original 401(k) provider and ask if they will accept a return of contributions under the CARES act. Or, you can ask your current 401(k) provider if they will accept a return of contributions from the previous plan, they might or might not. Or, you can open a private IRA and make deposits into that IRA. It would be treated as a special rollover rather than a contribution and you would not take a tax deduction on your tax return. Before sending money to any plan, make sure that they understand and agree that this is a return of a CARES act withdrawal, and not a new contribution. You have to set this up in advance, and you have to use your own after-tax money, it is not a tax deductible contribution or a pretax payroll deduction.
If you make a return of the withdrawal, you would then go back and file an amended 2020 tax return to change your answers on what you did with the money. Depending on when you make the return and how much you return, you might also have to file an amended 2021 tax return. Because of the complexities of filing more than one amended return, I would not file any amended tax return until after you have made all the returns that you plan to make. It would not be a good idea to make a partial return of funds, file an amended tax return, then make a second partial return of funds and file a second amended tax return.
You will have to decide whether it is better to make tax deductible new contributions and pay the tax on the withdrawal, or to stop your contributions, get the money in your paycheck, and then send it back as a return. As long as you are in the same tax bracket now as you were before, the financial effect of either decision is about the same. If you are in a higher tax bracket this year than last year, the current tax deduction on new contributions saves more money than returning the withdrawal. If you are in a lower tax bracket now, returning the withdrawal may save more money in the long run than making new tax deductible contributions.
