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dsdstatejacks
New Member

If i made a withdrawal from my 401k due to covid relief, can i defer the tax penalty until next year. I was told you can postpone the tax penalty for up to 3 years.

I paid 15% off the top to cover some of the taxes but im getting hit with around 10% as i file.
2 Replies
dmertz
Level 15

If i made a withdrawal from my 401k due to covid relief, can i defer the tax penalty until next year. I was told you can postpone the tax penalty for up to 3 years.

To be able to spread the income from this distribution over 3 tax years, this distribution must be reported on Form 8915-E which has not yet been released by the IRS and has not yet been implemented in TurboTax.  You'll have to wait for that form to be released. 

fanfare
Level 15

If i made a withdrawal from my 401k due to covid relief, can i defer the tax penalty until next year. I was told you can postpone the tax penalty for up to 3 years.

 

If I withdraw $100,000 and take three year spread-out option for COVID,
and in 2021 I do nothing with my IRAs.
what will be in the distribution box on 2021 Line 4a ?
I know I would pay federal tax on $33,333.

NJ is not dividing by three, so if 4a is not zero or even if it is zero , it looks like I would pay NJ tax on that money again.

Something will have to adjust it somewhere.

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