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COVID-19 IRA Withdrawal. I was told I wouldn't have to pay the additional 10% but when I filled it out on TurboTax it charged me the extra 10%. What do I need to do?

TurboTax didn't give me an option to say the money was from a COVID-19 hardship.
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3 Replies
DavidD66
Expert Alumni

COVID-19 IRA Withdrawal. I was told I wouldn't have to pay the additional 10% but when I filled it out on TurboTax it charged me the extra 10%. What do I need to do?

Withdrawals from a IRA because you were affected by COVID-19 are not subject to the 10% early withdrawal penalty.  Additionally, the tax on the distribution can be paid over a three year period. 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.  

 

In order to waive the penalty and elect to the option to pay the tax over three years, you will have to complete Form 8915-E, which has not been released by the IRS yet.  If you would like to review a draft copy of the form, click the following link:  Draft, Form 8915-E.  Once the IRS finalizes and releases the form, TurboTax will make it available.  Until then, you'll have to wait to finalize your and file your tax returns.

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rjhortho
New Member

COVID-19 IRA Withdrawal. I was told I wouldn't have to pay the additional 10% but when I filled it out on TurboTax it charged me the extra 10%. What do I need to do?

I am over 72+ and required to withdraw RMD but in 2020 was it necessary to withdrawal required amount totally?

SamS1
Expert Alumni

COVID-19 IRA Withdrawal. I was told I wouldn't have to pay the additional 10% but when I filled it out on TurboTax it charged me the extra 10%. What do I need to do?

No.  If you were required to make a required minimum distribution in past years, you were not required to for 2020.  If you only took a portion of your RMD in 2020, then indicate that in the RMD screens in TurboTax, directly after you enter your 1099R.  If you did not receive a 1099R because you did not take your distribution, your good to go.

 

Here is a link with information how the pandemic has affected your taxes.

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