401k Cares Act Covid Withdrawal and Repayment?

[fanfare]

@Caseyblue 

a repayment can be made anytime in 2022 before you file your 2021 tax return, according to instructions.

You can request an extension of time to file using Form 4868.

If you are paying back no more than 2/3s of the total distribution, you can handle it all on your 2021 tax return.

Otherwise, you'd have to amend 2020 tax return.

[JGH55]

I am totally perplexed with the CARES act and how TT is handling it.  Last year, following the step-by-step, TurboTax had me report the entire amount of my CARES distribution in 2020 as 1099-R income. There was NO option available to me to spread it out over 3 years.  I repaid part of the amount back in 2020 and tired to reported it as such on my TT filing but who knows if I was successful.  It is impossible to find specific details in my 2020 Turbo Tax form -- there is nothing that shows the full 1099 R in the same space as a 3-yr distribution and repayment.  Is that too simple to ask for?   I also made a repayment in 2021 and plan to again in 2022.  However, I have not received a 1099-R for the 1/3 payment since I received it last year for the full amount.   Now I can't report the repayment this year because without a 1099-R TT won't kick me to form 8915 and I can't find it by simply going to 'Forms'.   So I'm left with wondering if I have already paid taxes on the full amount in 2020 and whether I have to file a refund.  I also don't see how to correctly report my repayments for this year.    How can I correctly report this?

[fanfare]

@JGH55 

"TurboTax had me report the entire amount of my CARES distribution in 2020 as 1099-R income."

There's nothing to report on your 2021 tax return.

"I also made a repayment in 2021 and plan to again in 2022"

repayment is allowed only for a disaster distribution or a covid distribution.

You must report a disaster distribution or covid distribution on 2020 Form 8915-E.

You have to amend your 2020 tax return to include Form 8915-E, and also show the amount of repayment.

If you make another repayment in 2022, you'd have to file another amended 2020 tax return.

Note: your 2020 distribution is a covid distribution only if you met the criteria of being affected by COVID-19.

[fanfare]

@DaveF1006 

" you have until Aug 31 of this year "

where are you getting this information? it looks like misinformation to me.

Also, the link you posted has nothing todo with COVID distributions.

[fanfare]

@Caseyblue 

I suggest you ignore any response from a person labeled as EXPERT.

I don't think any of them have any idea what they're talking about.

[Caseyblue]

" you have until Aug 31 of this year "

where are you getting this information? it looks like misinformation to me.

I AM WONDERING THE SAME THING

[Chrishbrown22]

How 

[Caseyblue]

I paid 1/3 back last year, intend to pay 1/3 again this year & remaining 1/3 next year. I’m confused as to whether my upcoming repayment for this year is due April 18th OR

August 31st.

DaveF1006

Employee Tax Expert

Tuesday

“ If you are thinking about paying back 1/3 of the remaining distribution in 2022, you have until Aug 31 of this year to pay back the distribution to avoid paying taxes on it in 2022.  To pay it back, you will need to contact the trustee of your requirement account for repayment instructions.   

If you pay it back by Aug 31, you will not need to claim it as income in 2022. Here is an IRS source for further information.”

[fanfare]

@DaveF1006

The old notice you referenced says you have until August 31, 2020 to do something.

It is now April 2022.

@Caseyblue 

Please see Worksheet 5 Line 4 in the Instructions for form 8915-F at irs.gov.

https://www.irs.gov/pub/irs-pdf/i8915f.pdf

Also Instructions, Line 14.

If you are going to delay, file Form 4868

[ColeenD3]

The August 31 date was from an IRS release from 2020.

This is from Form 8915 instructions.

Line 14. Enter on line 14 of your 2021 Form 8915-F (2020 disasters) your total repayments—the sum of your excess repayments carried to 2021 and your repayments made for 2021. See Worksheet 3, later. A repayment is made in 2021 if it is made before you filed your 2021 return, and not later than than the due date (including extensions). 

@Caseyblue

[IslandWave]

I understand that pre-tax contributions such as paycheck deductions going into pre-tax 401K would not qualify as repayment.  However what about a paycheck deduction for Roth 401K?  Those are taxed before going into the Roth 401k, so wouldn't they count towards repayment?

[fanfare]

@IslandWave 

You must write a check or make an electronic deposit and inform the custodian you are repaying a disaster or covid-19 related distribution.

a repayment cannot be made by payroll deduction.

[IslandWave]

OK thank you.  When you say "a repayment cannot be made by payroll deduction"...Is this in the actual tax law, a rule set by the custodian, or just general consensus among tax professionals?

[fanfare]

whatever that may be, the purpose of your payroll deduction is established when you set it up.

Covid-19 disaster distribution is a special situation for 2020 only. you have three years to repay the distribution in whole or in part.

[gb1]

Does trustee send a form to prove that I repaid 1/3 this year?

I left the employer whose 401K that I withdrew from. Since then, I rolled over to Vanguard. It seems like I can send 1/3 to Vanguard & tell them it's a repayment. Question is: will Vanguard report to IRS that I repaid? Will I get a proof also?