Here is what we know so far. The IRS has a new Form 8915-E for COVID-19 related retirement account withdrawals. This form has not been finalized by the IRS for filing with a 2020 federal tax return. The IRS has not announced when this form will be available. Once available it will be included in the TurboTax software.
We estimate the form may be available sometime in February.
Here is information on how your taxes will be effected by the pandemic.
Has this been updated in TurboTax as of yet? I am still not getting the option to avoid paying the penalty.
Form 8915-E: Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which is used for COVID-related early distributions, will be e-fileable starting 2/25. The IRS is updating form 5329’s instructions to make it clear that COVID related exceptions cannot use 5329 and should use the new 8915-E.
The 8915-E will be used for penalty relief from early retirement plan distributions and include the option to spread the distribution income over 3 years. This may be a good option if the distribution is pushing you into a higher marginal tax bracket. You may end up paying less tax if you spread the distribution over the 3 years