This year I withdrew money for lost wages while we had to quarantine twice. Where do I put this on my return?
I also had a baby and read I could take $5,000 without penalty. Is there a special section for that or is it just “other”.
thanks
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You may have two separate exceptions to the early withdrawal penalty.
Question 3 in this IRS FAQ lists who is a qualified individual under the Cares Act: Coronavirus Relief
Final guidance on this has not been issued, so there may be additional qualifications added.
If you do qualify, you will report this on a Form 8915-E. The IRS has not yet finalized the Form 8915-E for retirement plan distributions under the CARES act. So this form cannot be included in the TurboTax program. You will not be able to proceed until the form is available.
The IRS has not communicated when the form will be finalized for inclusion on the 2020 federal tax return.
We estimate it will be sometime in February 2021 before the form is available. You can watch this link for the form availability. Currently, the form is not listed here since there is no estimated date. Once there is, you will find the form listed with the date available.
I'm not sure how much you withdrew. If you qualify, the Cares act allows for up to $100,000 penalty free. If this exception does not work for you, there is a new provision this year which allows for you to take up to $5,000 out without penalty for a qualified birth. This would be entered differently.
To enter the exception for the penalty, follow these steps:
For the Qualified Birth or Adoption Distributions, the IRS requires you to attach a statement that provides the name, age, and tax id number of the child or eligible adoptee. Because of this requirement, you will need to paper file your return.
It’s so weird they want all the additional info for the qualifying child when he’s a new dependent on my taxes this year. I withdrew about $15,000. I lost my job and I need the refund quickly. I’ll prob just pay the full penalty bc of the slow turn around on paper filing. Thanks for the response 🙂
If you wait till 2/24, you should be able to exclude the penalty and defer some of the income into future years, if you elect to. Form 8915-E: Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which is used for COVID-related early distributions, will be e-fileable starting 2/24. The IRS is updating form 5329’s instructions to make it clear that COVID related exceptions cannot use 5329 and should use the new 8915-E.
The pandemic has affected your taxes in many ways. Including reporting in TurboTax the amount of stimulus money you received. Click Here for more information on how the Pandemic affected your 2020 taxes.
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