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Level 1
posted Mar 21, 2023 4:36:54 PM

If I repay the withdrawals for a coronavirus distribution to my Roth IRA, will my 2023 AGI be reduced by the amount I pay back, since it was included in my 2020 AGI?

I filed my 2020 taxes using Turbotax and on those taxes I paid for the full amount of my Roth IRA withdrawals that year because I was under 59.5 years old. The Roth was/is an active IRA account and was /is much older than 5 years. I avoided the 10% early withdrawal penalty because the withdrawals fell under the exception for Coronavirus emergency-related withdrawals. I could have spread the income across 3 years but opted to have the withdrawals all included in my 2020 AGI. I have the option to pay back the withdrawals into my Roth IRA within 3 years, and it will be processed as some kind of rollover, I think, if I do that. My question is: if I repay the withdrawals in 2023, will my 2023 AGI be reduced by the amount I pay back, given that the withdrawals were all part of my 2020 AGI?

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1 Best answer
Level 15
Mar 21, 2023 9:07:14 PM

If you repay the distribution, because you included the entire amount in income on your 2020 tax return you'll need to amend your 2020 tax to obtain a refund of the taxes paid.  Nothing of this would go on your 2023 tax return.

3 Replies
Expert Alumni
Mar 21, 2023 7:11:29 PM

If  it was a Roth IRA, your contributions were not included in your AGI.  If you make a repayment, it will be treated as a rollover- look for the screen below in the retirement section.

 

Level 15
Mar 21, 2023 8:33:34 PM

For 2020, did you complete Form 8606 Part III prior to making entries on Form 8915-E, as required by the Instructions?

 

If not you should amend your 2020 tax return.

@yejtax 

Level 15
Mar 21, 2023 9:07:14 PM

If you repay the distribution, because you included the entire amount in income on your 2020 tax return you'll need to amend your 2020 tax to obtain a refund of the taxes paid.  Nothing of this would go on your 2023 tax return.