COVID 19 CARES Act 401K Distribution

Forum|Forum|5 years ago
February 7, 2021
2 replies
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Hello,

Back in April 2020, I made withdrawal from my personal 401K account from TD Ameritrade - "COVID 19 distribution." It was from qualifying 401K account and I had qualifying COVID-19 related hardship. My situation has changed and, in January 2021, I decided to pay back the distribution to my 401K account at TD Ameritrade. CARES Act allows people to pay back "COVID 19 distribution" within 3 years so they do not have to pay taxes or simply get refund for paid taxes. I guess it basically extends regular 60 day rollover period to 3 years. That is my understanding. Since I took distribution, TD Ameritrade sent me 1099R Form. I recorded that distribution in Turbotax. My question is where do I record repayment of that distribution in Turbotax? When I go to rollover section, Turbotax discusses only 60 day rollover. It does not have any information on COVID-19 CARES Act 401K 3 year rollover period. It is a bit surprising. Thank you for your help,

Matt

Best answer by PattiF

The IRS has not released the forms yet for this. At this point in time the Form 8915-E (Qualified 2020 Disaster Retirement

Plan Distributions and Repayments (Use for Coronavirus-Related Distributions)) is not finalized.

We currently do not have an estimated date when the form is ready.

Please sign-up here and we will email you once the form is live.

PattiFAnswer

Level 15

The IRS has not released the forms yet for this. At this point in time the Form 8915-E (Qualified 2020 Disaster Retirement

Plan Distributions and Repayments (Use for Coronavirus-Related Distributions)) is not finalized.

We currently do not have an estimated date when the form is ready.

Please sign-up here and we will email you once the form is live.

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nuala

Level 2

The IRS has issued Revised Form 8915-E 2020 as of 12 Feb 2021. When will this update be active on Turbotax?

EbonyL122824

Level 9

@nuala This form will be available on 02/25/2021. You can check the IRS forms availability here.

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russellmhill1

Level 2

Will my state, Alabama, also allow me to divide the 401k distribution up over 3 years for taxation purposes?

WendyN2

Level 9

Yes, according to the Alabama Society of CPAs, under section 2202 of the CARES Act, qualified individuals receive favorable tax treatment with respect to distributions from eligible retirement plans that are coronavirus-related distributions. A coronavirus-related distribution is not subject to the 10% additional tax under § 72(t) of the Internal Revenue Code (Code) (including the 25% additional tax under § 72(t)(6) for certain distributions from SIMPLE IRAs), generally is includible in income over a 3-year period, and, to the extent the distribution is eligible for tax-free rollover treatment and is contributed to an eligible retirement plan within a 3-year period, will not be includible in income. Section 2202 of the CARES Act also increases the allowable plan loan amount under § 72(p) of the Code and permits a suspension of payments for plan loans outstanding on or after March 27, 2020, that are made to qualified individuals.