I was laid off at the beginning of the Covid pandemic last year, at the end of February 2020. I had borrowed from my 401(k) plan in either late 2018 or early 2019 for an expensive dental procedure that I needed, and had automatic repayments coming out of my paycheck until my layoff in 2020. Shortly before, the company that laid me off had been bought by another company and then changed companies for who was handling those 401(k) investments (unsure if that's relevant). I received no information from the new company about my loan, nor was I certain that they had the information transferred over to them to indicate that I had that loan until I called them yesterday, during which the agent told me that I had a 1099-R form she then sent to me.
My question, is that I'm currently trying to add that to my unfiled 2020 Tax Return, and the site was asking about alternative situations that may help reduce the amount of taxes that could be collected on that disbursement. Specifically, the one I'm confused about, is related to this one:
Medical Expenses (in excess of 7.5% of AGI)
Does this apply to me, if the medical procedure (and initial loan) was done prior to 2020 but the disbursement didn't happen until last year due to unemployment? If so, do I count the disbursement as a part of my AGI to calculate the 7.5%? Is the relevant AGI specifically for 2020, or would it be from the year I took out the initial loan?
