@shaunaegt wrote:
I have done all that and I was told by another user to say "no" when asked is you need to report 1/3 of a distribution taken under the cares act which does take care of the revisit the 1099-r section but I don't think I'm getting the 10% penalty free option of it. Im being charged a lot??
You cannot be charged a 10% early withdrawal penalty if you did not have a retirement plan distribution in 2021 and did not enter a 2021 Form 1099-R on your 2021 tax return.
The 2nd year of the 2020 distribution amount is entered on your tax return as ordinary income and taxed at your current tax rate.
All the federal taxes withheld on the 2020 distribution were entered on the 2020 tax return as a tax payment. They were included in your 2020 federal tax refund.
The taxes withheld on the 2020 distribution cannot be spread over 3 years, only the distribution was eligible to be spread over 3 years.
