Is the government waving the federal taxes on covid 401k disbursements?

[Opus 17]

No.  Only the 10% penalty for early withdrawal.  Withdrawals from qualified retirement plans are always subject to regular income tax. 

[SweetieJean]

The IRS has a new Form 8915-E for COVID-19 related retirement account withdrawals.  This form has not been finalized by the IRS for filing with a 2020 federal tax return.  The IRS has not announced when this form will be available.  Once available it will be included in the TurboTax software.  It is estimated that the form may be available sometime in February.

[megsage]

What does this form accomplish? The refund of the 10% penalty?

[Opus 17]

---

@megsage wrote:

What does this form accomplish? The refund of the 10% penalty?

---

Yes, and also you have the option of spreading the income out over 3 years instead of paying the tax all at once.  If you plan to certify that your withdrawal was covid-related, you need to wait for this form.