How can I reflect the SECURE Act provision for "qualified birth or adoption distribution" to make this penalty-free? Provision under SECURE act.

[LinaJ2020]

Here are the steps:

In TurboTax online,

• Sign in to your TurboTax account and select Pick up where you left off
• At the right upper corner, in the search box, type in "1099r" and Enter
• Select Jump to 1099r
• Follow prompts
• On screen, These Situations May Lower Your Tax Bill, under Other Reason, enter the amount 
• Continue to proceed.

Per IRS, after December 31, 2019, a qualified birth or adoption distribution made from an eligible retirement plans is not subject to the 10% additional tax on early distributions.  For more information, click here: 

https://www.irs.gov/publications/p571

[williamjunker]

This is very helpful. Though I think this info should be more clearly listed as you navigate through your filing.

[july007A]

I am in the same sitution and I followed the step here. thanks. I have one quick question, According to Form 5329 from IRS "Attach a statement that provides the name, age, and TIN of the child or eligible adoptee. See Notice 2020-68" 

How do I attached a statement in turbo tax. Or do I need one since I am reporting my child born in 2020 as a dependent anyway.

[DawnC]

If you have the child listed as a dependent and have entered the child's birthday and SSN in the dependent section, you should not need to add the statement.   You can't e-file through TurboTax when an addendum or statement is attached to a tax return.   Adding statements will cause you to have to file by mail, which you really do not want to do; the IRS is way behind on paper-filed documents.  :(     In your case, however, the information is already included on your tax return, so you should not get an error when you e-file your return.   @july007A    

[dmertz]

An explanation statement is needed because the child's date of birth would not otherwise appear anywhere in the filed tax return.

[july007A]

good point. I did not think about that. DOB is not on the tax form

[DawnC]

That is true.  There is a dependent information worksheet that has the birthday information, but that does not get transmitted with the return when you e-file.   You can use that as your attachment when sending in the return.   The only other thing I can think of is using the covid exception to the early withdrawal penalty if that is an option.   Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty.   You qualify if:

• You, your spouse, or your dependent are diagnosed with COVID-19
• You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
• You had work hours reduced to COVID-19
• You’re unable to work due to child care closure or hour reduction

If you qualify for this exception, you can have the penalty waived and would not need to attach the statement.   Also, you would have the option to spread the ordinary income over 3 years or include it all on this 2020 return you are filing now.  If you don't qualify for the covid exception, you would need to send in the statement which will prevent e-filing.   @july007A