Yes, you will be able to waive the penalty and spread the tax over 3 years (2020-2022). And if you all or part of it back within those three years, you can get a refund of those taxes. However, the form you need to claim the covid tax relief is 8915-E - and it won't be in TurboTax until the end of the week. So, you will need to come back and enter your 1099-R this weekend to get that relief.
You can use the link below to sign up and be notified when it is available.
Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty. You qualify if:
- You, your spouse, or your dependent are diagnosed with COVID-19
- You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
- You had work hours reduced to COVID-19
- You’re unable to work due to child care closure or hour reduction
The distribution would be taxed over 2020, 2021, and 2022. You’ll have that time to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions, and if you pay back the amount within that time, you’ll be able to claim a refund on those taxes.
Please sign-up here and we will email you once the form is live. @jdkluck
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