I took 401k early withdrawal due to Covid in 2020 and filed tax and chose 3 years payments. How do I file the 2nd payment in 2021 tax return?

[kl904]

How do we account for the withheld taxes from the 2020 withdrawal? Since this is not a new 1099-R, I can't figure out how to distribute the federal taxes over 3 years that I withheld from that distribution/how to account for it. 

[DoninGA]

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@kl904 wrote:

How do we account for the withheld taxes from the 2020 withdrawal? Since this is not a new 1099-R, I can't figure out how to distribute the federal taxes over 3 years that I withheld from that distribution/how to account for it. 

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The federal income taxes withheld from the 2020 distribution were entered on the 2020 tax return as a tax payment.

The taxes withheld are NOT spread over 3 years, only the distribution can be spread over 3 years.

[JamesG1]

The withholding reported on the 2020 1099-R would likely have been refunded or used to pay the Federal balance due on the 2020 Federal 1040 tax return.

You will need access to the figures on your 2020 IRS Form 8915-E.  To access IRS Form 8915-F:

• Go to Federal / Wages & Income / Your income / Retirement Plans and Social Security / IRA, 401(k), Pension Plan Withdrawals (1099-R),
• Click Start / Revisit to the right,
• At the screen Have you ever taken a disaster distribution before 2021?, answer Yes.
• At the screen Did you take a 2020 Qualified Disaster Distribution? select Yes, you had a 2020 Qualified Disaster Distribution.

@kl904

[cvx1800]

So, I followed the instructions in saying "No" to receiving a 1099-R in 2021 and then filled out my 2020 Qualified Disaster Distribution (Coronavirus related withdrawal) from my 2020 return, but it did not change my 2021 federal refund amount.  This leads me to believe that the software is not working properly.  Why did my federal refund not decrease once I entered taxable income from the 2020 withdrawal?

[DoninGA]

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@cvx1800 wrote:

So, I followed the instructions in saying "No" to receiving a 1099-R in 2021 and then filled out my 2020 Qualified Disaster Distribution (Coronavirus related withdrawal) from my 2020 return, but it did not change my 2021 federal refund amount.  This leads me to believe that the software is not working properly.  Why did my federal refund not decrease once I entered taxable income from the 2020 withdrawal?

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You have to enter 1/3 of the 2020 distribution in both boxes -

If you had a Covid-19 related distribution in 2020 and selected to spread the distribution over 3 years -

Answer No when asked if you received a Form 1099-R in 2021, if you did not receive the form

Answer Yes when asked if you took a disaster distribution

Answer Yes when asked if you took a Qualified 2020 Disaster Distribution

Check the box that this was a Coronavirus-related distribution reported in 2020

If the 2020 distribution was from an account that was Not an IRA

2020 Form 8915E Line 9 - Enter 1/3 of the amount from the 2020 distribution in both boxes for Line 9

If the 2020 distribution was from an IRA account

2020 Form 8915E Line 17 -  Enter 1/3 of the amount from the 2020 distribution in both boxes for Line 17

The 1/3 of the amount from the 2020 distribution will be entered on the 2021 Form 1040 Line 4b if from an IRA or on Line 5b if from a retirement plan other than an IRA

[cvx1800]

I followed your instructions for a "Not an IRA" by entering 1/3 the amount of distribution in both boxes for Line 9 and the 2021 Form 1040 Line 4b did not update on the form.

Still, my federal refund remains unaffected by anything entered concerning the 2020 Qualified Disaster Distribution information entered..

Is the Turbotax software working properly??????

[tsteuben]

I didn't think it was working correctly either. Finally figured out that you need to enter the amounts in two boxes and not just one. Enter your amount in the top AND the bottom box:

2020 Form 8915E, line 9, if you checked the box on that line, enter 0

2020 Form 8915E, line 10

2020 Form 8915E, line 9