No. the amount reported on the IRS Notice 1444 for Economic Impact payment is not taxable. However it is to be show on the tax return because the IRS use that information to determine whether you have received the correct amount of Stimulus.
Now the other question, " Did either of you take a disaster distribution at any time between 2018 and 2020?" relates to a totally different subject. If you withdrew funds from your 401k, in 2020, there is a special provision to allow you to report the withdrawal over a three year period. Tax Year 2021 is the 2nd year for reporting a third of that withdrawal if you made that election.
Steps to report your distribution:
How do I file the cares act 401k withdrawals for the 2nd year ?
- Sign into your TurboTax account > Select Wages and Income > Scroll to IRA, 401(k), Pension Plan Withdrawals (1099-R) > Edit/Add.
- Continue through Form 1099-R entry if applicable and select I took out this money due to a qualified disaster.
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