when filing taxes on the cares act 401K withdrawal. i took out 100,000 out of my 401K. I think I have 3 years to pay back or invest in another retirement. When I add the 1099 to my income its taxed the whole $100,000. is this correct? or can I pay a third for 3 years?
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Yes, you can select to spread the COVID related withdrawal over 3 years:
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 can choose to have the distribution taxed over 2020, 2021, and 2022 instead of only in 2020. You’ll have three years to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions. If you pay back the amount within that time, you’ll be able to claim a refund on those taxes paid when you file an amended tax return. Please see IRS Coronavirus-related relief for retirement plans and IRAs for more details.
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