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chenenko
New Member

My hours and pay were affected by COVID-19. I took a distribution from my IRA to help cover some costs. How do I reflect this in Turbotax?

It's not clear how do avoid the 10% tax penalty even though under the CARES Act I qualify.
1 Best answer

Accepted Solutions
ColeenD3
Expert Alumni

My hours and pay were affected by COVID-19. I took a distribution from my IRA to help cover some costs. How do I reflect this in Turbotax?

Form 8915 -E is not yet finalized by the IRS. Once it is, you may finish this portion of your return.

 

 

Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty.

You qualify if:

  • You, your spouse, or your dependent are diagnosed with COVID-19
  • You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
  • You had work hours reduced to COVID-19
  • You’re unable to work due to child care closure or hour reduction

The distribution would be taxed over 2020, 2021, and 2022. You’ll have that time to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions, and if you pay back the amount within that time, you’ll be able to claim a refund on those taxes.

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2 Replies
SweetieJean
Level 15

My hours and pay were affected by COVID-19. I took a distribution from my IRA to help cover some costs. How do I reflect this in Turbotax?

The IRS has not yet released the form for this, so please check back in February.

ColeenD3
Expert Alumni

My hours and pay were affected by COVID-19. I took a distribution from my IRA to help cover some costs. How do I reflect this in Turbotax?

Form 8915 -E is not yet finalized by the IRS. Once it is, you may finish this portion of your return.

 

 

Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty.

You qualify if:

  • You, your spouse, or your dependent are diagnosed with COVID-19
  • You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
  • You had work hours reduced to COVID-19
  • You’re unable to work due to child care closure or hour reduction

The distribution would be taxed over 2020, 2021, and 2022. You’ll have that time to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions, and if you pay back the amount within that time, you’ll be able to claim a refund on those taxes.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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