Maybe. You effected a withdrawal of $40,000 in 2020. Given IRS guidance, you had the option of including all of that withdrawal amount as income in 2020, or you had the option of including the withdrawal amount in income ratably over a three-year period, starting with the year in which you received your distribution. Thus, for 2020, what option did you choose?
You do have the option to repay all or part of the amount of a coronavirus-related distribution to your 401k, provided that you complete the repayment within three years after the date that the distribution was received. It appears that you have already started to repay your distribution. According to the IRS, if you repay a coronavirus-related distribution, the distribution will be treated as though it were repaid in a direct trustee-to-trustee transfer so that you do not owe federal income tax on the distribution.
Based on whatever option you chose in 2020, as you start to repay your distribution you would go back and amend the prior year return (in this case 2020) to reflect that whatever amount of the withdrawal you included in income has in fact been paid back, and therefore, whatever tax was attributable to the distribution for 2020 should be refunded to you.
The following IRS example may prove helpful in understanding how repayment affects taxes and amended returns:
"If, for example, you receive a coronavirus-related distribution in 2020, you choose to include the distribution amount in income over a 3-year period (2020, 2021, and 2022), and you choose to repay the full amount to an eligible retirement plan in 2022, you may file amended federal income tax returns for 2020 and 2021 to claim a refund of the tax attributable to the amount of the distribution that you included in income for those years, and you will not be required to include any amount in income in 2022."
Additionally, here is a link to the IRS webpage from which the above example was taken. There are other FAQs on this page that you might find helpful.
Coronavirus Relief_Retirement Plans and IRAs_FAQs
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