If I received a 401k withdrawal and my 1099r in box 7 says 1 instead of 2, then how do I file the form 8915-E to stop the penalty from being charged? I called my retirement plan and they said that I n

[CatinaT1]

You will report this on a Form 8915-E.  The IRS has not yet finalized the Form 8915-E for retirement plan distributions under the CARES act.  So this form cannot be included in the TurboTax program.  You will not be able to proceed until the form is available.

The IRS has not communicated when the form will be finalized for inclusion on the 2020 federal tax return.

We estimate it will be sometime in February 2021 before the form is available.  You can watch this link for the form availability.  Currently, the form is not listed here since there is no estimated date.  Once there is, you will find the form listed with the date available.  

IRS forms availability table for TurboTax individual (personal) tax products

Additionally, the IRS will not start processing returns until February 12, so waiting for this form is not slowing down the processing of your return.

[dmertz]

Also note that code 1 is the correct code, so enter the Form 1099-R as received.  You'll be able to edit the 1099-R once Form 8915-E becomes implemented in TurboTax and cause the distribution to be exempt from penalty.

[Mommyof3]

What if the 1099r form box 7 has code 2? Do I still need to file 8915-e? I have entered both my 1099R and I am not getting the penalty at all I have one for the hardship box 7 has code 1 but that too is not getting a penalty. Then the second 1099R was the Pandemic distribution but the box 7 is code 2 so again no penalty. 

I just not sure why Im waiting to file if I may not need the 8915-E but maybe wait till the 12th 

[DaveF1006]

If one of your 1099-R has a code 1, then you may need to wait for the release of 8915-E. Code 1 is a early withdrawal distribution where no exception applies. Without the 8915-E,  you could be penalized for the 10% Early Withdrawal Penalty. if you have signed up for the update, Please sign-up here and we will email you once the form is live.

[dmertz]

The draft instructions for Form 8915-E indicate that you must file Form 8915-E if you received a CRD, and that would include on reported with code 2, but as with any draft the instructions might change.

The payer has the option of using code 2 in box 7 if they know that the distribution is a CRD, with the code 2 automatically making the distribution exempt from an early-distribution penalty, but you still need Form 8915-E to be able to spread the income from this distribution over three years if you so choose or if you repay any of the distribution by the due date of your tax return.

[Mommyof3]

But the 1099R one box 7 that has code 1 isnt anything to do the pandemic withdrawal. 

They actually usee the code 2 in box 7 on the pandemic withdrawal 

Thats why im wondering if im good to go