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novodka44
Returning Member

I took a covid related ira withdraw and the program does not allow me to spread the withdraw over 3 years.

please help
7 Replies
MinhT1
Expert Alumni

I took a covid related ira withdraw and the program does not allow me to spread the withdraw over 3 years.

One of the relief measures for Covid-19 is the option to spread the taxation of your retirement distribution (up to $100,000) over three years.

 

Please read this IRS document for more information.

 

To take advantage of this option, please follow these steps:

 

  1. Enter your form 1099-R normally.
  2. After entering your form 1099-R, click Continue until you reach the screen Do any of these situations apply to you?
  3. Check the box which says I took out this money because of a qualified disaster (includes COVID-19).
  1. Click on the radio button Yes this was withdrawn due to COVID-19 and click Continue.
  1. Follow the interview until you arrive at the screen Was this a withdrawal due to COVID-19 or a Qualified Disaster Distribution?
  1. Click on the radio button Yes this was withdrawn due to COVID-19 and click Continue
  2. Follow the interview until you arrive at the screen Does [name] want to pay all the tax this year?
  3. Click Continue and the taxation of your distribution will be spread over three years.

 

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novodka44
Returning Member

I took a covid related ira withdraw and the program does not allow me to spread the withdraw over 3 years.

I never see the screen that asks me that question do I want to spread over 3 years. It just never appears.

RayW7
Employee Tax Expert

I took a covid related ira withdraw and the program does not allow me to spread the withdraw over 3 years.

The form for this transaction, 8915-E,  was not available until recently.  Be sure to update your version of TurboTax so all updated forms are available.

 

This interview question will appear while entering your 1099-R information.

fanfare
Level 15

I took a covid related ira withdraw and the program does not allow me to spread the withdraw over 3 years.

Turbotax Online has real problems registering your changes when you use EDIT/UPDATE.

novodka44
Returning Member

I took a covid related ira withdraw and the program does not allow me to spread the withdraw over 3 years.

I never get the screen, 

    Does [name] want to pay all the tax this year? Click Continue and the taxation of your distribution will be spread over three years.

To appear.  I do get a strange question about cryptocurrency .

novodka44
Returning Member

I took a covid related ira withdraw and the program does not allow me to spread the withdraw over 3 years.

I do see the was this withdraw covid related button. The next question that appears is about crypto currency. I deleted and added the 10999 r , no luck. Also tried changing the code from 2 to 1, no luck.  I have taken my tax form to a local CPA. This is not worth the time I am putting into it.

DaveF1006
Employee Tax Expert

I took a covid related ira withdraw and the program does not allow me to spread the withdraw over 3 years.

This is how to report.

  1. Go to federal>wages and income>all income
  2. Retirement plans and Social Security>show more 
  3. Ira (401K), pension plan Withdrawals(1099R) Start
  4. Here you will enter your 1099R.  After you are done with one and reach a summary screen, there will be an opportunity to enter more 1099's.
    1.  Here you will select the first choice 
    1. I took out this money because of a qualified disaster (includes COVID-19)
    1. Scroll through the next few screens until you reach a screen that says is this a withdrawal due to COVID-19 or a Qualified Disaster Distribution?
    2. You will say yes, this was withdrawn due to COVID 19
    3. Next screen says COVID-19 distribution Here you will indicate that all or some was a COVID 19 withdrawal.
    4. Next will ask about your COVID related stuff.  There is a checkbox that you must answer saying that you were financially impacted by COVID 19. This will waive the early withdrawal penalty.
    5. Then it asks if you repaid the distribution, you can say no unless you did.
    6. Then it asks if you want to pay the tax all the tax this year. leave the check box blank and continue.
    7. This will generate a 8915-E and will spread your taxable amount over a three-year period automatically.
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