Hello
I took about $20K in 2020 under the Cares Act. I am currently calculating my taxes to determine if I want to claim the entire amount in one year or spread out the payments over the next three years. On my 2020 1099-R. Box 1 indicates $20,000 Box 2 indicates $20,000 and Box 4 Federal Withholding $2,000.00. My state does not tax on retirement distributions.
From my understanding I either can claim the entire amount of $20K in one tax year or spread it out over three years which would $6667 for tax year 2020, 2021 and 2022.
What about the Federal Withholding that was taken out and is listed in Box 4 on my 2020 1099-R form, is the Federal Withholding spread out over the three years as well or do I claim the entire $2000 of Federal Withholding on my 2020 taxes regardless if I claim the entire $20K or if I spread it out for tax years 2020, 2021 and 2022 AND if I chose to spread it out over the three years, I have either have to make estimated payments to cover the $6667 income for 2021 and $6667 income for 2022 or have more withholding taking out from my main W2 income?
Any help would be greatly appreciated.
Thank you in advance for your assistance.
