I entered my 1099-R because I received an early withdrawal of my retirement account due to COVID. The software is saying that I will need to revisit this section because it has not been updated with the most recent tax rules. When will that happen?
The Coronavirus-related relief measures for retirement plan distributions have to be reported on form 8915-E which has not yet been finalized by the IRS. No date has been given by the IRS for the finalization of this document.
TurboTax will update this section after the IRS releases the final version of form 8915-E and its instructions. Please revisit this section at a later date.
My family is in the same boat. What happens if it is not finalized by the time we have to file?
We are waiting on the IRS to finalize the form. The IRS is not accepting returns or processing till 2/12 so still plenty of time. Click here to be added to the email list for notification when the 8915-E form goes live.
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 is 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.
Hello,
Does this mean the early withdraw penalty (10%) will not apply?
And is their a list of who qualifies for this Disaster Retirement Plan Distributions?
Yes, the early withdraw penalty (10%) will not apply.
For purposes of section 2202 of the CARES Act, you are a qualified individual if –
See Coronavirus-related relief for retirement plans and IRAs questions and answers
the IRS has published 8915-e...when will turbo tax update their software?
The IRS recently updated the form from draft to final version. It is being prepared for release.
Form 8915-E: Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which is used for COVID-related early distributions, will be ready for e-file starting February 24th. It was recently moved out of the draft form by the IRS.
This still hasn’t been updated as of 2/23, yet turbo tax prices are increasing 2/28. Any updates on this?
Yes -- We are looking at an expected release date of February 25 for Form 8915-E. Currently, if you are filing a return with the following forms you must paper file your return.
The IRS will be allowing filers with the 8915-E and 7202 forms to have the ability to e-file their return. Our engineers are working hard on updating the program to accommodate the changes. Until the program is updated for each form, customers will need to paper file their return (see links below). If they want to e-file, they will need to wait until the program has been updated.
The following dates are when we expect to have e-filing available for each form (Note: these are approximate dates):
If you would like to receive an email when the 8915-E is available, please sign up by going to this TurboTax Help article: Why am I getting a 10% penalty on my 1099-R when I withdrew fund during Covid? (Form 8915-E) [See screenshot below.]
Helpful links:
I just downloaded all updates manually, and still do not see Form 8915-E in my Income section near my CARES act withdrawal from my 401k. Any idea when this form will be live in Turbotax?
@maxwellodog17 wrote:
I just downloaded all updates manually, and still do not see Form 8915-E in my Income section near my CARES act withdrawal from my 401k. Any idea when this form will be live in Turbotax?
Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments is available for both the TurboTax online web-based editions and the TurboTax desktop CD/Download editions.
If you are using the desktop editions you have to update your software. Click on Online. Click on Check for Updates.
You need to enter or edit your Form 1099-R and answer the questions concerning a Covid-19 distribution after the 1099-R is entered.
Does the most recent update, 2020.r19.040, include tax form 8915-E so TurboTax can appropriately make adjustments for the COVID CARES Act, and ask the appropriate questions for those adjustments?
@Hillstones wrote:
Does the most recent update, 2020.r19.040, include tax form 8915-E so TurboTax can appropriately make adjustments for the COVID CARES Act, and ask the appropriate questions for those adjustments?
Yes, the software update release on 02/26/2021 includes Form 8915-E.
You need to enter or edit your Form 1099-R and answer the questions concerning a Covid-19 distribution.
Thanks! I trashed the tax file I started weeks ago so I could start fresh with the updated version.
Sorry, didn't figure out until last night. I had already entered my 1099-R before I did the update. So I deleted the 1099-R that had the distribution, and re-added it to the return, it then properly went thru all the Covid distribution questions for a hardship withdrawal and calculated everything correctly, including asking me if I wanted to pay the tax all this year or split evenly over 3 years.
Thanks
Yep! Me too. I decided to start fresh with a new return to make sure any calculations were correct regarding COVID related withdrawals from a retirement account. I had previously read to divide the amount by 3 to pay the taxable income over a 3 year period, but now that TurboTax is updated for COVID and the CARES Act, you can now input the full amount of your 1099-R and go through all the COVID questions, including the option to pay the taxes in full for 2020, or split them evenly over a 3 year period.
One thing I saw in the comments is that self-employed people affected by COVID should wait until after March 11 because there is another COVID related form that should be live in TurboTax after March 11, once the IRS finalizes that form.
The TurboTax software and website was updated on Feb. 25 for COVID Form 8915-E (TurboTax version 2020.r19.040, or later). If you are self-employed and impacted from COVID19, I think an additional tax form for self-employed people will be updated on March 11. This was previously mentioned in the comments on this post.
The 8915-E is currently in TurboTax so you can apply the covid-related relief to your retirement distributions at this time. If you have already entered your 1099-R(s), you can either EDIT the form, or delete it and re-enter it (this may be a better option if you are experiencing difficulties), and you should see the covid questions after you hit ''Continue''. You will be able to waive the 10% penalty and spread the tax ratably over tax years 2020-2022. @smaakfive
Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals is also now available to e-file in TurboTax as well. @Hillstones
More details on covid relief provided by 8915-E.
And 7202 - Tax Relief for Self-Employed and Small Businesses Under the Families First Coronavirus Response Act
I tried to delete and re-enter the 1099-R. I have sent Federal but when I try to submit State, I always get “Check This Entry”
Pension Deduction Worksheet:Federal Amount We’re still Working on updates related to retirement distributions that qualify for disaster or Covid relief. You can keep working on your return and will remove this message when it’s ready.
@smaakfive It could be that your State has not yet finalized their tax regulations to comply with the Federal CARES act.
Click this link for more info on How to Contact your State Dept of Revenue to verify this.
TurboTax will incorporate the state changes as soon as soon as they are able to after the states release them.
8915-E is now available. Go to Turbotax 2020 and go to Forms and search 8915-E
You don't need to search for the form. When you enter your withdrawal information and answer the COVID questions, it automatically processes the 8915-E form for you. If it had already been entered, delete the entry and re-enter the 1099-R information and you will get the COVID questions. Make sure your TurboTax software version is 2020.r19.040 or later. The current version is now 2020.r21.042.
Even after the latest update, TurboTax Home/Bus does not calculate 1040 Line 4b correctly if there are two IRA COVID distributions to report. TT Support is aware. Until TurboTax creates a software fix or other workaround for this error, and to maintain an accurate "Federal Tax Due" result, a temporary bandaid may be to include the second IRA distribution as "Other Common Income" in the 1099-MISC income section. Not sure how IRS will like that one if a TurboTax correction is not available before April 15!