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

[crazydewcat]

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?

[MinhT1]

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.

[sylvax2]

My family is in the same boat. What happens if it is not finalized by the time we have to file?

[SamS1]

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. 

[LindaBob]

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?

[MaryK4]

Yes, the early withdraw penalty (10%) will not apply.

For purposes of section 2202 of the CARES Act, you are a qualified individual if –

• You are diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention;

• Your spouse or dependent is diagnosed with SARS-CoV-2 or with COVID-19 by a test approved by the Centers for Disease Control and Prevention;

• You experience adverse financial consequences as a result of being quarantined, being furloughed or laid off, or having work hours reduced due to SARS-CoV-2 or COVID-19;

• You experience adverse financial consequences as a result of being unable to work due to lack of child care due to SARS-CoV-2 or COVID-19; or

• You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to SARS-CoV-2 or COVID-19.

See Coronavirus-related relief for retirement plans and IRAs questions and answers

@LindaBob

[gcmester]

the IRS has published 8915-e...when will turbo tax update their software?

[DianeW777]

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.

[Boomerryan723]

This still hasn’t been updated as of 2/23, yet turbo tax prices are increasing 2/28. Any updates on this?

[Irene2805]

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.

• 8915-E (Qualified 2020 Disaster Retirement Plan Distributions and Repayments) 
• 7202 (Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals)

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):

• Form 8915-E on 2/25
• Form 7202 on 3/11

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:

• How do I print and mail my return in TurboTax Online?
• How do I print my return in the mobile app?
• How do I print and mail a return in the TurboTax for Windows CD/Download software?

@Boomerryan723

[maxwellodog17]

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?

[DoninGA]

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@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?

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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.

[Hillstones]

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?

[DoninGA]

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@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?

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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.

[Hillstones]

Thanks!  I trashed the tax file I started weeks ago so I could start fresh with the updated version.