Hi,
I didn't know that penalty could be waived for a COVID related reason. I am filing an amendment return.
Do I need to delete 1099-R from the list on "Here's your 1099-R Info" screen and re-enter? When I click edit from the list, I don't see "Tell us if any of these uncommon situations apply" screen. I saw "I took out this money because of a qualified disaster (includes COVID-19)" when I filed 2021 return. I created substitute 1099-R for 2020.
Thank you!
You will amend your 2020 return to indicate that you took a COVID withdrawal. On your 2021 return, you will include the amount you paid back.
You do not re-enter a 1099-R as it does not apply to this year. You will still go that section. When asked if you have a 1099-R, answer no. Then you will be asked if you made a disaster-related retirement distribution, answer yes.
Follow these steps to report any further tax to be paid:
You will be guided through the screens.
Thank you, ColeenD3!
Sorry I didn't explain clearly. My question is to delete 1099-R from 2020 return to re-enter it on 2020. As I explained in my original question, there is no box to click for disaster related withdrawal when I tried to edit current 1099-R.
I am not amending 2021.
Thank you for your help!
Yes, if you created/entered the 2020 Form 1099-R on your 2021 return for a COVID distribution then you will need to delete the 1099-R. You only enter the 2020 Form 1099-R for the COVID distribution on your 2020 return.
As ColeenD3 mentioned to report the 2nd part (if you spread it over 3 years) or to enter repayments:
Please verify that you check the box next to "If this was a Coronavirus-related distribution reported in 2020 check here". Also, make sure you enter the amount from Form 8915-E, line 9 twice (if it was not from an IRA) or enter the amount from Form 8915-E, line 17 twice (if it was from an IRA). This amount should be 1/3 of your 2020 COVID distribution.
Thank you, DanaB27!
Please allow me to clarify my situation. I didn't have any withdrawals from IRA to report on the 2021 Return. I withdrew funds from Roth in Jan 2021 therefore, I created a substitute 1099-R and reported on the 2020 Return with 10% penalty. 2021 Return was already filed without a 1099-R as I already created a Substitute 1099 and paid tax and penalty with 2020 return.
Now I learned that I don't need to pay penalty so I want to amend my 2020 return. I clicked Edit on my 1099-R and went through but I didn't have an opportunity to click if withdrawal is due to a disaster. Under "Do any of these situations apply?", I see only "I need to file s substitute 1099-R", "The corrected box is checked" and "None of these apply". I was asked later if I used funds for a specific purpose but none of those applied to my case. How can I tell TurboTax that the funds were withdrawn due to a disaster?
I would like to request only penalty waiver. No need to spread over 3 years.
Please be aware, you cannot just report a 2021 Form 1099-R on your 2020 tax return (you stated withdrew it in Jan 2021). The IRS is matching forms and if you don't report the 2021 Form1099-R on your 2021 tax return then the IRS will have questions.
Also, "a coronavirus-related distribution is a distribution that is made from an eligible retirement plan to a qualified individual from January 1, 2020, to December 30, 2020, up to an aggregate limit of $100,000 from all plans and IRAs." (IRS)
Please be aware, that you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. Only the earnings will be taxable and subject to the 10% early withdrawal penalty if you are under 59 1/2.