DanaB27
Expert Alumni

Retirement tax questions

Yes, if you spread the income over 3 years then 1/3 will be added to 2021 as income and you will have to pay the tax on it. Any tax withheld on the original distribution was only applied to 2020 (and excess might have been refunded), therefore you will have to pay the 2021 part in 2021.

 

 

Please verify that you have the box checked next to "If this was a Coronavirus-related distribution reported in 2020 check here". Then make sure you enter the amount from Form 8915-E, line 9 twice (if it was not from an IRA) or enter the amount from Form 8915-E, line 17 twice (if it was from an IRA). This amount should be 1/3 of your 2020 COVID distribution since you selected to spread it over 3 years.

 

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