If you took an early withdrawal from a retirement plan due to COVID-19, you are not subject to the 10% penalty. You also have three years to pay the tax, or to roll the funds over. To do so requires filing Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments. This form was just finalized by the IRS, and is expected to be available in TurboTax on February 25.
i just checked and i'm not seeing the form in turbo tax, as of when today will it be available?
Form 8915-E is available in the online version, but it does not let you make the income tax payments ratably for Covid-related Roth withdrawals. It says I reported $0 as a Covid-19 withdrawal when on the previous question I responded that ALL of it was due to Covid. If I check the box "pay tax on entire. . . ," it still shows $0 at the top, but it calculates the correct amount of tax, with no penalty, for the entire amount.
Hopefully, they get the issue with 1/3 payments squared away or I will have to use another software to do my taxes. Tried entering 1099-R in manually, amount keeps showing up as $0.
Using Premier version online.
Yes, Form 8915-E is available on TurboTax. You might want to clear your cache when you sign into TurboTax. Go to the interview section and navigate to the retirement section and indicate that you took a withrawal from your retirement account. This will trigger the form.
What is Form 8915-E Qualified 2020 Disaster Retirement Plan Distributions and Repayments?
The CARES Act provides tax relief for up to $100,000 of COVID-19 related distributions from eligible retirement plans. So, if you, your spouse, your dependent, or a member of your household was impacted by the coronavirus and you withdrew from your retirement accounts in 2020 before the age of 59 ½, you may not have to pay the 10% early withdrawal penalty (or the 25% additional tax for SIMPLE IRAs).
When you enter your Form 1099-R, we’ll ask you a few questions to determine your eligibility for the exemption, and complete and include Form 8915-E in your return if you qualify.
To qualify for Form 8915-E and to be exempt from the early withdrawal penalty due to COVID-19, a few rules have to be met.
1. You have to be a qualified individual. To qualify, one of these must be true:
2. The withdrawal had to come from an eligible retirement plan, which could be any of the following:
3. The distribution had to have been made in 2020 before December 31, 2020.
There is also a $100,000 distribution limit to the exemption. Any distributions over that amount, may be subject to the additional tax.
When do I have to pay taxes on COVID-19 related distributions?
Can I repay a COVID-19 related distribution?
Related Information:
Thank you for your response. My issue is an error with the tax software itself. It is not calculating the accurate dollar value for Covid-19 distribution based on the info I provided. If there is a temporary work-around until they offer a fix, I am all ears.
Check the coding in Box 7 of the 1099R. I agree it appears to not be accepting the Roth Codes for the deferral. I might suggest deleting the 1099R and re-entering it. If you enter a 1 in the box 7 and then include only part of the distribution was taxable, which would be the earnings, then it should calculate.
The TurboTax Online edition has been updated with Form 8915-E, to remove the early withdrawal penalty for early retirement plan distributions and other relief provisions because of COVID-19. TurboTax CD/Download should be updated this evening (Feb 25, Pacific time).
I was able to answer the covid related questions for the 1099-R. I am however getting an error for my state return when I try to file. It says “Check This Entry: Pension Deduction Worksheet: Federal Amount We’re still working on updates related to retirement distributions that qualify for disaster or covid relief. You can keep working on your return and we’ll remove this message when it’s ready. “ and then there’s a box for federal amount. Is anyone else encountering this problem?
I just called Turbo Tax and it was stated to me that those encountering this is happening due to not being able to e-file on the federal level yet with the 8915e. It looks like it's a state issue, but it's for sure not. She said it should be available midnight tomorrow (2/26). This is beyond frustrating!
What a terrible response! It's showing a problem on state returns, but it's a federal e-file issue? I'm sure tomorrow midnight is going to be next Tuesday at 6pm.
I'm really surprised that Turbo Tax has dropped the ball on this so hard, people have been filing with other tax services for 10 days now.
The 8915-E form is currently available in the TurboTax online versions but it appears that was a problem with the desktop update that was supposed to be released today so they are working to get it fixed for release tomorrow.
Me too. Same issue with Michigan. I checked 4:57am est still won’t let me file. I called them yesterday too and got the same answer.
@Taxesaretheworst2021 same here with NY at 6:59am... so annoying. I just want to final my taxes!
Just filed mine. If you already entered your 1099-R(s), edit each one of them individually and answer the COVID-19 questions.
Yes - Form 8915-E is available in both the CD/Download and online versions of TurboTax.
Please make sure your program is up-to-date. In TurboTax CD/Download, you will be prompted to download any updates available when you open the program. You can also update the program while you have it open by following these steps:
Once your program is updated, go back through the 1099-R portion of the program and proceed through the screens following the 1099-R entry screen.
Screenshot #1
Screenshot #2
@Irene2805 any update on this?
I am however getting an error for my NY state return when I try to file. It says “Check This Entry: Pension Deduction Worksheet: Federal Amount We’re still working on updates related to retirement distributions that qualify for disaster or covid relief. You can keep working on your return and we’ll remove this message when it’s ready.
I am unable to edit anything on this form and not able to file my taxes due to this!
The form is now included in the Windows desktop version. Still seems a bit buggy though. What is mainly missing is that when you opt to spread the taxes over 3 years, it still shows the full distribution as taxable on the 1040 main page (in my case reduced my a small amount due to the fact of non-deductible contributions in prior years.)
Anybody else experiencing this? Turbotax please address this issue.
@Burny wrote:
The form is now included in the Windows desktop version. Still seems a bit buggy though. What is mainly missing is that when you opt to spread the taxes over 3 years, it still shows the full distribution as taxable on the 1040 main page (in my case reduced my a small amount due to the fact of non-deductible contributions in prior years.)
Anybody else experiencing this? Turbotax please address this issue.
The question is asked if you want the full amount of the distribution taxed in 2020. If you DO NOT check that box then only 1/3 of the taxable amount of the distribution will be entered on the Form 1040 on either Line 4b or 5b depending if the distribution was from an IRA or a pension.
I agree, that is how it should work. I have the box unchecked and it still makes the distribution fully taxable for this year. Maybe a bug due to the fact that I have non-deductible IRA contributions. Just a guess.
@traceyc30 wrote:
Following
Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments is available for both the TurboTax online web-based editions and the TurboTax desktop CD/Download editions.
If you are using the desktop editions you have to update your software. Click on Online. Click on Check for Updates.
You need to enter or edit your Form 1099-R and answer the questions concerning a Covid-19 distribution.