Enter the 1099-R here:
Federal > Wages and Income > Retirement
If this is a COVID-related early distribution, though, be aware that the IRS has not yet released the form to handle that.
If your 401K distribution was covid-related, you are going to want to wait until Form 8915-E has been finalized and added to TurboTax as it will provide tax relief for those distributions. To enter a 1099-R:
- Open (continue) return if you don't already have it open.
- Inside TurboTax, search for 1099-R and select the Jump to link in the search results.
- Answer Yes on the Your 1099-R screen, then select Continue.
- If you land on the Your 1099-R Entries screen instead, select Add Another 1099-R.
- Select how you want to enter your 1099-R (import or type it in yourself) and then follow the instructions. You can add up to 20 1099-Rs.
If you took a distribution from a retirement account due to corona virus related issues, you will be able to waive the penalty and spread the ordinary tax over tax years 2020-2022. However, the forms have not been finalized by the IRS yet, so TurboTax has not been updated. Once the forms are final (no date determined by IRS yet), you will see the options to apply the tax relief provisions on Form 8915-E. If you click on that link, you will be able to sign up for an email notification when the form is ready! The IRS does not start accepting returns until Feb 12th, so check back then to see what the status is.
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
The distribution would be taxed over 2020, 2021, and 2022. 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.
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