8915E Overstates Distributions on 1040

Forum|Forum|5 years ago
March 19, 2021
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When filling out 8915E, I noticed that on Form 1040, it shows the original distribution from 1099-R in addition to the amount filled in on 8915E. How do I get 1040 to reflect the repayment, and proper net distribution.

dmertz

Level 15

Form 1040 line 4a or 5a should show the entire gross amount of the distribution but only, if the option to spread the income over 3 years is chosen, only 1/3 of the taxable amount of the distribution should appear on line 4b or 5b. Only the amounts on lines 4b and 5b affect the rest of your tax return.

However, if you chose to include the entire taxable amount on your 2020 tax return instead of spreading it in equal parts over 3 years, the entire taxable amount of the distribution will appear on line 4b or 5b.

If you repaid some or all of the distribution, you indicate that during the Form 1099-R and on Form 8915-E that is subtracted from the portion (all or 1/3) you otherwise chose to include on your 2020 tax return.

db9fanAuthor

Level 2

Thank you!

fanfare

Level 15

so far I have tried four tax packages, three online and one desktop

All four give a different taxable amount.

I believe one is correct, but it's not TurboTax.

"The 8606 instructions clearly say to enter the line 15b on the 1040 line 4b and the 8915-E say to enter line 19 on the 1040 line 4b. "

even though it says "enter" not "include", when two forms reference the same line, you have to combine the amounts.

If you reduce the amount paid back to $30,000 there is a taxable COVID amount and a taxable unqualified amount from form 8606 line 15c (which does use the word "include"), not 15b, and the sum should be on 1040 line 4b.