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Electroplater
Level 2

Does the Cares Act early withdrawal exemption apply to distributions from 401(k) when 1099-R Box 7 has codes 1B? Is this a not a qualified plan? Works if the code is 1

I withdrew less than the $100,000 from my 401(k) account and was issued two 1099-R in different amounts that equal the amount I withdrew. One 1099-R has Box 7 with the code 1 and the other has the code 1B. TurboTax processed the code 1 as expected but claims I owe the early withdrawal penalty for the Code 1B.
1 Best answer

Accepted Solutions
DaveF1006
Expert Alumni

Does the Cares Act early withdrawal exemption apply to distributions from 401(k) when 1099-R Box 7 has codes 1B? Is this a not a qualified plan? Works if the code is 1

Yes, you should get questions regarding COVID regarding the first 1099-R if you entered Code 1 in Box 7 and then Code B in the second row in Box 7.

 

After entering the 1099R, make sure when you reach the screen that says Do any of these situations apply to you, select I took out this money because of a qualified disaster (includes COVID-19) As you continue through the remainder of the screens, there will be additional Covid -related questions asked.

 

I tested this and it worked in my program

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5 Replies
ColeenD3
Expert Alumni

Does the Cares Act early withdrawal exemption apply to distributions from 401(k) when 1099-R Box 7 has codes 1B? Is this a not a qualified plan? Works if the code is 1

Code B Designated Roth account distribution. These are both from a 401k? 401k should not have code B. Box 7 codes

 

No, There should be no issue with Code B. Make sure that you correctly answered all the Care questions for each 1099-R

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Electroplater
Level 2

Does the Cares Act early withdrawal exemption apply to distributions from 401(k) when 1099-R Box 7 has codes 1B? Is this a not a qualified plan? Works if the code is 1

Yes, they are from my 401K. My about was split between two 1099R forms. When I have two codes 'IB' for box 7, I do not get  any questions about covid. When there is one code '1' it will ask me if this was due to covid. 

 

Thanks!

DaveF1006
Expert Alumni

Does the Cares Act early withdrawal exemption apply to distributions from 401(k) when 1099-R Box 7 has codes 1B? Is this a not a qualified plan? Works if the code is 1

Yes, you should get questions regarding COVID regarding the first 1099-R if you entered Code 1 in Box 7 and then Code B in the second row in Box 7.

 

After entering the 1099R, make sure when you reach the screen that says Do any of these situations apply to you, select I took out this money because of a qualified disaster (includes COVID-19) As you continue through the remainder of the screens, there will be additional Covid -related questions asked.

 

I tested this and it worked in my program

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Electroplater
Level 2

Does the Cares Act early withdrawal exemption apply to distributions from 401(k) when 1099-R Box 7 has codes 1B? Is this a not a qualified plan? Works if the code is 1

I'm using the online version and it does not ask me that.

I deleted that 1099R, cleared browser cache, turned computer off and on and went back and re-entered it.

 

Same as before, Box 7 with "1" works and gives me the option "I took out this money because of a qualified disaster (includes COVID-19)"

 

Box 7 with a "1" and "B" does not give me that option.

 

Tried entering the 1099R on HRBlock online and it says IRS has not finalized this section.

 

Do you think the online version is not updated completely?

 

Thanks!!

 

Electroplater
Level 2

Does the Cares Act early withdrawal exemption apply to distributions from 401(k) when 1099-R Box 7 has codes 1B? Is this a not a qualified plan? Works if the code is 1

Got it to work somehow, pressing the back key perhaps, instead of edit button

Thanks for the help!!

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