How to make 2nd tax payment on covid-19 401-k withdrawal from 2020

[NCC-1701-D]

I made covid-19 penalty free 401K and IRA withdrawals in 2020 and elected to pay the tax over 3 years.  I made the first tax payment on my 2020 tax return which I filed in 2021.  The 2020 tax return included form 8915E.  I have no idea how to make the 2nd tax payment when filing my 2021 tax return.  I though it would come up in disaster relief.  Can someone please explain exactly how I make my next tax payment for the deferred 401K / IRA income.

[DoninGA · Accepted solution]

To report the payment for tax year 2021 you will need the new IRS form 8915-F.  The IRS has not yet released the final version of this form or the instructions.  It may not be available until mid-March 2022.  Once it becomes finalized by the IRS then TurboTax will include the form in the TurboTax software in the section for reporting a Form 1099-R.

See this TurboTax support FAQ for the Form 8915-F - https://ttlc.intuit.com/community/retirement-tax-credits-and-deductions/help/what-is-form-8915-e-qua...

[MinhT1]

You will report the second taxable portion of your 2020 coronavirus distribution in the Retirement section under Wages and Income of TurboTax.

However, this section is yet not ready as the IRS has not yet issued instructions and you'll need to revisit this section later.

[dddcooke]

Any  update on this form?

[DoninGA]

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@dddcooke wrote:

Any  update on this form?

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Form 8915-F, Qualified Disaster Retirement Plan Distributions and Retirements for tax year 2021 is estimated  to be available in TurboTax on 03/24/2022

Go to this TurboTax website for IRS forms availability - https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_online_individual.html

[jdmar25]

Two questions: 1. Do you enter the full distribution amount? 2. I received a 1099 in 2021, but I didn't receive one in 2022. Should I have from my financial institution? And if I'm not supposed to receive a 2nd 1099, what information do I submit?

[DoninGA]

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@jdmar25 wrote:

Two questions: 1. Do you enter the full distribution amount? 2. I received a 1099 in 2021, but I didn't receive one in 2022. Should I have from my financial institution? And if I'm not supposed to receive a 2nd 1099, what information do I submit?

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You do not enter the 2020 Form 1099-R on the 2021 tax return.  If you requested to have the 2020 distribution spread over 3 years then you enter 1/3 of the amount distributed in 2020 on the 2021 tax return.  No, you will not receive another Form 1099-R for the 2nd or 3rd year of the 2020 distribution.

You must go to the Retirement Income section of the program for a Form 1099-R to be able to enter your 2nd year of the 2020 distribution -

Click on Federal

Click on Wages & Income

Scroll down to Retirement Plans and Social Security

On IRA, 401(k), Pension Plan Withdrawals (1099-R), click on the Start or Revisit button

On the screen Did you get a 1099-R in 2021? Click on NO, if you did not receive a 2021 Form 1099-R

If you had a Covid-19 related distribution in 2020 and selected to spread the distribution over 3 years -

Answer Yes when asked Have you ever taken a disaster distribution before 2021?

Answer Yes when asked if you took a Qualified 2020 Disaster Distribution

Check the box that this was a Coronavirus-related distribution reported in 2020

In the box 2020 Form 8915-E, line 4, column b - Enter a 0

If the 2020 distribution was from an account that was Not an IRA

2020 Form 8915E Line 9 - Enter 1/3 of the amount from the 2020 distribution in both boxes for Line 9

If the 2020 distribution was from an IRA account

2020 Form 8915E Line 17 -  Enter 1/3 of the amount from the 2020 distribution in both boxes for Line 17

Do not enter anything in the other boxes, leave them blank (empty)

The 1/3 of the amount from the 2020 distribution will be entered on the 2021 Form 1040 Line 4b if from an IRA or on Line 5b if from a retirement plan other than an IRA

After completing the Wages & Income section you will land on a screen Did you take a disaster distribution at any time between 2018 and 2020?

Answer NO since you have already completed the entering the 1/3 of the 2020 distribution.

You can view your Form 1040 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

Using the desktop editions click on Forms.  Open the Form 1040

Screenshots from the online editions -

[DianeW777]

Your questions will be shown and the answers will follow each question below.

Question: Do you enter the full distribution amount? 

• No, you enter the 1/3rd amount when you are on the 8915-F screen  (Use your 2020 Form 8915-E to complete this screen)

Question:  I received a 1099 in 2021, but I didn't receive one in 2022. Should I have from my financial institution? 

• You do not need your financial institution information for your 2021 tax return for the distribution you received in 2020.

Question: And if I'm not supposed to receive a 2nd 1099, what information do I submit?

• There is nothing to submit with your 2021 tax return in regards to a distribution you chose to claim over the three year period due to COVID.

Follow the instructions provided by our awesome Tax Champ @DoninGA for your entry.

[tguinn1280]

I have a problem and I hope someone can help me. I have already filed and received my refund, but I did not realize that this was not included till after I filed. 

What do I need to do now to pay my next payment on this?

[JamesG1]

If your return has been transmitted and accepted by the IRS, you can amend your Federal 1040 tax return.

If you used TurboTax Online, simply log in to your account and select “Amend a return that was filed and accepted.” 

If you used the CD/download product, sign back into your return and select “Amend a filed return.” 

You must file a separate Form 1040-X for each tax return you are amending.

IRS Form 8915-F information can be entered at the screen Did you take a 2020 Qualified Disaster Distribution?  Report Qualified 2020 Disaster Distributions from Part II and Part III from the 2020 8915-E by following these steps.

• Go to Federal / Wages & Income / Retirement Plans and Social Security / IRA, 401(k), Pension Plan Withdrawals (1099-R).
• Click Start / Revisit to the right.
• At the screen Did you receive any 1099-R forms? select No.
• At the screen Have you ever taken a disaster distribution before 2021?, Click Yes.
• At the screen Did you take a 2020 Qualified Disaster Distribution?, enter 8915F and 8915E information.
• At the screen Did you take a disaster distribution at any time between 2018 and 2020? you are instructed to select YES if you need to report 1/3 of the amount of your distribution from a prior year.  That has already been done.  Select No, I didn't.

See also this TurboTax Help.

@tguinn1280

[Anonymous2020]

I followed the steps and it still tells me the section needs review and my Federal Tax Due is unchanged telling me it hasn't been included in the calculation.  Please help!

[DoninGA]

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@Anonymous2020 wrote:

I followed the steps and it still tells me the section needs review and my Federal Tax Due is unchanged telling me it hasn't been included in the calculation.  Please help!

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Go back to the Form 1099-R section and review your answers -

Answer Yes when asked Have you ever taken a disaster distribution before 2021?

Answer Yes when asked if you took a Qualified 2020 Disaster Distribution

Check the box that this was a Coronavirus-related distribution reported in 2020

In the box 2020 Form 8915-E, line 4, column b - Leave blank or enter a 0

This is not required on a Form 8915-F for a Coronavirus-related distribution

If the 2020 distribution was from an account that was Not an IRA

Enter 1/3 of the amount from the 2020 distribution in both boxes for Line 9

2020 Form 8915E, line 9, if you checked the box on that line, enter 0

2020 Form 8915E Line 9 

If the 2020 distribution was from an IRA account

Enter 1/3 of the amount from the 2020 distribution in both boxes for Line 17

2020 Form 8915E, line 17, if you checked the box on that line, enter 0

2020 Form 8915E Line 17 

Do not enter anything in the other boxes, leave them blank (empty) or enter a 0

The 1/3 of the amount from the 2020 distribution will be entered on the 2021 Form 1040 Line 4b if from an IRA or on Line 5b if from a retirement plan other than an IRA