How to amend returns after 401k cares act loan repayment in 2022?

[mikehouser42]

I took a 401k loan under the cares act in 2020. I spread the income over 3 years, but I repayed it in full (25k) in 2022.  How do I amend my 2020 and 2021 turbotax returns, form 8915F?  I don't see any options recommended by experts in the turbotax amend tool.

[DaveF1006]

You may address this in your 2022 return. Here is how.

1. Go to federal>wages and income>Retirement plans and Social Security>IRA's, 401K's etc.
2. The first question asks if you receive a 1099R.  If you did not receive it, say no.
3. The next page asks if you took a disaster distribution in prior years or repay prior years disaster distributions. Here is where you will report your prior year's repayment.
4. If you receive a 1099R in 2022, you will report it and the same question will appear later after you report your 1099R information.  Here is a screenshot on what that screen will look like in your program.

[fanfare]

after your payment offsets one third of your distribution for 2022, zeroing it out,

you will have a carryover of two thirds of your payback, which you carry back to your 2020 and 2021 tax returns to zero that taxable amount also.

@mikehouser42 

[mikehouser42]

Thanks for your help.  I geuss I didn't enter something correctly? The summary page still shows taxable income. 

[fanfare]

TurboTax has not made Form 8915-F available to you yet.

Try again later after an update.

@mikehouser42 

[mikehouser42]

Thanks for your help.  Can you advise on steps to amend 2020 and 2021 returns to account for the repayment of 401k distribution?  The income was allowed to be spread equally over 3 years using Form 8915-F.    @fanfare 

  

[fanfare]

I would start with the 2020 tax return
strictly speaking you're supposed to use the worksheets and attach worksheets to 8915-E/F.
On line 14 or 25 - depending on the type of account - you need the one third of your total repayment.
This makes the taxable amount zero.
You will use overrides. (If you're using TurboTax Online, that's not possible)
Ignoring the worksheets is the simplest way.

You have to explain on Form 1040-X what you did and why.

[fanfare]

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@mikehouser42 

[fanfare]

post removed

@mikehouser42 

[fanfare]

If you  change the 1099-R  taxable amount to zero

You won't need Form 8915-E.

When mailing 1040-X, do not include your old 1040 nor your revised 1040 because the Form 1040-X reflects any changes there and becomes your new tax return. 

 That leaves the issue of "new or changed" forms.

You'll have to decide if you want to submit 1040-X without Form 8915-E/F (not recommended).

You can get the form in fillable PDF from IRS.gov and make the changes manually to add an amount paid back of one third.

That's line 14,15 for 401k plans.

after amending 2020,2021, you can file 2022 without amending.

@mikehouser42 

[fanfare]

the above works for 2020.

there is no 1099-R for 2021

@mikehouser42 

[rgperrijr13]

Hi, so I made may repayment today after just under 3 years and filled out the questions accordingly on the 2022 return. I had my payment spread out over the three years. TurboTax shows no tax due on 1/3 however will TurboTax then know I made the repayment so that I can amend my 2021 and 2020 tax returns?

[DanaB27 · Accepted solution]

You will need to amend your 2020 and 2021 tax returns to carry back the excess repayment to 2020 and 2021. Therefore, you will carry back 1/3 of the repayment to each year. 

For the 2020 tax return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
4.  On the "Your 1099-R Entries" screen click "edit" next to the Form 1099-R for the Covid distribution
5. Continue until the "Did you repay any of this distribution" screen and select "I repaid part of this distribution" and enter 1/3 of the distribution amount as repaid on the next screen

For the 2021 tax return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Click "Continue" on the “Your 1099-R Entries​​​​​​​” screen
5. Answer "Yes" to the "Did you take a disaster distribution in prior years or repay…" screen
6. Answer "Yes" on the "Did you take a 2020 Qualified Disaster Distribution" screen
7.  Check the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and enter your information.
8. Enter the 1/3 of the distribution amount as repaid on the "Did you repay any 2020 Qualified Disaster Distribution in 2022?" screen

@rgperrijr13 

[rgperrijr13]

Great, thanks for the information! To be clear, for example, the amount I paid back was say $75,000. On the 2022 return, I entered $75,000 because that's the amount I paid back as of this writing. I haven't filed yet, so was supposed to enter $25,000 paid back on the 2022 return and then go back as you said and amend using $25,000 for 2021 and $25000 for 2020? Or do I have it right? 

[LindaS5247]

Yes, you are interpreting that correctly.  You will enter your $25,000 repayment for 2022, on your current return.

And then as Per DanaB27 above,

For the 2020 tax return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
4.  On the "Your 1099-R Entries" screen click "edit" next to the Form 1099-R for the Covid distribution
5. Continue until the "Did you repay any of this distribution" screen and select "I repaid part of this distribution" and enter 1/3 of the distribution amount as repaid on the next screen

For the 2021 tax return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Click "Continue" on the “Your 1099-R Entries​​​​​​​” screen
5. Answer "Yes" to the "Did you take a disaster distribution in prior years or repay…" screen
6. Answer "Yes" on the "Did you take a 2020 Qualified Disaster Distribution" screen
7.  Check the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and enter your information.
8. Enter the 1/3 of the distribution amount as repaid on the "Did you repay any 2020 Qualified Disaster Distribution in 2022?" screen

These amendments will record and correct your prior year repayments.

Click here for a video on "How to Amend your Tax Return?"

Click here for additional information for filing amended tax returns.