I took a qualified disaster withdrawal from my 401...
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Ashmbarber
New Member

I took a qualified disaster withdrawal from my 401K due to Covid-19. I filed before the 8915-E form was finalized. What is my next step? Do I need to amend my return?

 
2 Replies
DanaB27
Employee Tax Expert

I took a qualified disaster withdrawal from my 401K due to Covid-19. I filed before the 8915-E form was finalized. What is my next step? Do I need to amend my return?

Yes, if you took a qualified disaster withdrawal from your 401K due to Covid-19 and didn't file Form 8915-E then you need to file an amended return. But you might want to wait until your refund or payment is processed. Please be aware that you can e-file your 2020 amended federal tax return, but most states require amendments to be printed and filed by mail. Please see FAQ How to amend a tax return for instructions.

 

  1. Login to your TurboTax Account 
  2. Click on "Search" on the top right and type “1099-R”
  3. Click on “Jump to 1099-R” and enter your 1099-R (if you started this before you should see the “Your 1099-R Entries” screen and will click "edit")
  4. Continue until "Tell us if any of these uncommon situations apply" screen
  5. Select "I took out this money because of a qualified disaster (includes COVID-19)"
  6. Answer all follow-up questions carefully.

 

Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty.

 

You qualify if:

  • You, your spouse, or your dependent are diagnosed with COVID-19
  • You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off or having work hours reduced because of COVID-19
  • You’re unable to work due to child care closure or hour reduction because of Covid-19
  • 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.

 

You can choose to have the distribution taxed over 2020, 2021, and 2022 instead of only in 2020. You’ll have three years to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions. If you pay back the amount within that time, you’ll be able to claim a refund on those taxes paid when you file an amended tax return. Please see IRS Coronavirus-related relief for retirement plans and IRAs for more details.

 

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Level 15

I took a qualified disaster withdrawal from my 401K due to Covid-19. I filed before the 8915-E form was finalized. What is my next step? Do I need to amend my return?

if your tax return showed an early withdrawal penalty, you can get that removed by amending.

Otherwise you don't have to amend if you are satisfied with your tax return.

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