I received an early withdrawal of my retirement account due to COVID. When will software be updated to include IRS laws for this?

[SamS1]

Letter could be for a number of reasons.  Did you have any outstanding obligations that could be causing a refund offset?  Could be a CP2000 matching notice for 2019/2018.  There are a number of reasons you could be receiving the notice.  If you purchase the Premium Services bundle for CA residents?  If you did, you are covered from notice and audit questions through TaxAudit.com.  Here is link to notice help to assist you with your IRS correspondence.

[Hillstones]

It could be anything.  The letter hasn't arrived yet, but coming today.  We don't have any outstanding obligations.  We didn't purchase the Premium Service Bundle because TurboTax had our audit level at the low end.  Our only change this year was the IRA distributions due to COVID, and a comment above seems to indicate a TurboTax error in the calculations.  Since TurboTax found no errors when we did our taxes, we assumed it was correct, and it might be.

[Hillstones]

Whew!  You always hate knowing something is coming from the IRS after you finish your taxes, but in this case, it is the letter for the second economic impact payment.  

[SamS1]

@Hillstones That's great news!  Yeah the nasty ones come certified mail.  When you see a certified letter from the IRS, you know they mean business. I am glad it was not a software issue, too.  Generally, TurboTax is pretty through with testing and review before a software update is released.  

[Hillstones]

Yes, and I have used TurboTax for decades, but with COVID, everything is different.  We wanted to do them sooner, but had to wait until the Feb 25th update so TurboTax would recognize the COVID tax benefits.  Funny thing is, I don't recall ever getting a notice from the IRS for the first economic impact payment.  I went online looking for my payment and having the option to enter my bank account info for the direct deposit and then received it shortly afterwards.  Or maybe I did, and I don't remember the notice from the IRS.

[SamS1]

I have only seen notices for the 2nd stimulus payment.  I have not seen any notices for the 1st stimulus payment. Not sure why the IRS only sent out the one.  If you had the first payment directly deposited, you can check your bank statements in the March-May timeframe and see when it actually hit your account, if you are concerned you may not have received it.  If your situation has not changed from 2019 tax reporting, the IRS could be using your 2019 return to determine your payment amount.  Of course you can always check the status of your 3rd stimulus at Get My Payment 

[Melody25]

I'm having trouble with how TT is calculating the total taxable amount for my early withdrawal from my IRA. It's dividing $40K over 3 years ($13,333) in line 17 instead of $20K over 3 years ($6,666). Can someone help me understand why it's calculating the $13,333 instead of $6,666? I withdrew $40K and repaid $20K in December 2020, so the taxable amount should be $20K. Thank you

[macuser_22]

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@Melody25 wrote:

I'm having trouble with how TT is calculating the total taxable amount for my early withdrawal from my IRA. It's dividing $40K over 3 years ($13,333) in line 17 instead of $20K over 3 years ($6,666). Can someone help me understand why it's calculating the $13,333 instead of $6,666? I withdrew $40K and repaid $20K in December 2020, so the taxable amount should be $20K. Thank you

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The 2020 taxable amount is zero because you repaid $20,000 of the $40,000 distribution so only the remaining $20,000 will be taxes in 2021  and 2022.   The 1/3 (and more) of the distribution taxable in 2020 was paid back.

[Melody25]

@macuser_22 Thank you! I understand now

[Hallwill58]

It's April 23rd and i still get a message the form is not available. 

[DanaB27]

Please see macuser_22 comment below.

[Edited 4/25/2021 | 8:27am PST|

@Hallwill58

[macuser_22]

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@DanaB27 wrote:

Form 8915-E is available, please make sure that you have updated your TurboTax Desktop software:

1. Click on "Online" on the top menu
2. Select "Check for updates"

@Hallwill58

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Try it yourself Dana.     It appear that they broke it with the last update.    After the "Do you want to pay all the tax thus year" screen it loops back to the first screen and then gives this screen.   

(I took this screenshot 3 minutes ago using the online version - after the Apr 22 r27 update, the desktop version does the same thing.)  It seems like the calculations are being done correctly on the 8915-E form and the 1040 looks correct but the interview does not reflect that.

[Nicole-T]

I received the same error message; to check back later when the software is updated. The federal tax due is not reflecting the 1/3 income amount. My software is up to date. Please advise.

[CatinaT1]

You may need to clear your computer's cookies and cache.

[macuser_22]

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@CatinaT1 wrote:

You may need to clear your computer's cookies and cache.

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The interview is broken - it does the same thing with the CD/download versions.  The 4/22 update broke it.