Retirement tax questions


@fanfare wrote:

 ,

I do believe COVID-19 related distribution is not in the category of 2020 Qualified Disaster Distribution .

They are separate.   See Form 8915-F.

@Critter-3 

@allen-young 


Correct.

 

@allen-young 

There are two separate provisions under the law.

 

A qualified disaster distribution applied to federal disasters like hurricanes and wild fires.  If you took a distribution because of a disaster-related hardship, you have 3 years to pay it back into the retirement account  and reverse the income tax you paid.  COVID-19 was specifically excluded from being considered a disaster for this rule, because it was covered by a different special rule.  If you did not take a disaster distribution in 2020, then answer "no" because you had nothing to repay in 2021.

 

Separately, if you took a COVID hardship distribution in 2020, you have three years to pay that back and reverse the taxes.  The program may ask about that separately, although if you repaid a 2020 COVID hardship distribution, you generally have to go back and amend your 2020 return instead, as far as I can remember.  In any case, if you are asked about repaying a COVID disaster distribution, if you didn't make a repayment, you would answer "no" here as well.