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wchengkanhi
Returning Member

Early withdrawal penalty

I had a 401-K loan but I was furloughed in 2020 due to COV.  My 401-K payment was via my payroll.   Since I was furloughed, I did not have any paycheck so by 401-K land was deemed as a distribution.  On the 1099-R, box 7 has distribution code L1.  I noticed that when I put in the code "L" on Turbo Tax application, it will not take me to the question on if the distribution is related to COV-19.  If I don't put the code "L", then it will take me to the COV-19 related question.  My distribution is COV related but Turbo Tax doesn't seem to allow me to respond to the question if I input distribution code "L" on the 1099-R.  Please advise, thank you.

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1 Reply
MaryK4
Expert Alumni

Early withdrawal penalty

Unfortunately, Code L are loans treated as distributions.  Loans that are treated as deemed distributions pursuant to § 72(p) cannot be a coronavirus-related distribution. 

 

See Guidance for Coronavirus-Related Distributions and Loans .

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