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?

[yejtax]

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?

[MaryK4]

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.

[fanfare]

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 

[dmertz · Accepted solution]

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.