When will there be more prompts for COVID-19 early withdrawal for IRA/Roth IRA withdrawals? Seems the platform is not up to date.

[caedwards21]

When will there be breakdowns to allow 3 years to spread the tax liability or determine eligibility for waiving the early withdrawal fee based on those impacted?

[DanaB27]

Form 8915 -E, that reports the Coronavirus-related relief measures for retirement plan distributions, is not yet finalized by the IRS. TurboTax will update this section after the IRS releases the final version of Form 8915-E and then you can finish your distribution information.

Please follow these steps to enter your 1099-R:

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R” and you should see the “Your 1099-R Entries” screen
4. Click "edit" and continue until "Tell us if any of these uncommon situations apply" screen
5. Select "I took out this money because of a qualified disaster (includes COVID-19)" (TurboTax will walk you through questions once this section is ready)

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, your spouse, or your dependent are diagnosed with COVID-19
• You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off or having work hours reduced because of COVID-19
• You’re unable to work due to child care closure or hour reduction because of Covid-19
• You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to SARS-CoV-2 or COVID-19.

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.

[shatherley874]

Just confirming, distributions from Roth (>5 yr old) should not incur any taxation correct?

[npierson7]

No, it will be taxed as an income. The temporarily relief allows you to spread the taxes over three years, and avoid the 10% penalty, if other conditions are met. 

[shatherley874]

Ok thank you.  So even though it was a Roth distribution, the taxes are still applicable...I misunderstood the original documentation I read

[CatinaT1]

A Roth IRA has tax-free growth as long as you've owned your account for 5 years and you're age 59½ or older when you withdraw your money. 

If you make a withdraw prior to meeting the five-year rule and/or are withdrawing any investment earnings, you generally incur a 10% penalty on that growth you have withdrawn. This specifically applies to investment earnings. The contributions you’ve made can be withdrawn at any time because you’ve already paid taxes on this money.

What the Cares Act is doing is providing relief from any penalty, either due to the 5 year rule or age, for Covid related reasons.

So regardless, you will not pay tax on any withdraw from a Roth IRA, but the penalty is what you are possibly avoiding if you meet the Care Act guidelines for early withdraw.

Legislation restricts relief to qualified participants with a valid COVID-19 related reason for early access to retirement funds. These include:

• Being diagnosed with COVID-19
• Having a spouse or dependent diagnosed with COVID-19
• Experiencing a layoff, furlough, reduction in hours, or inability to work due to COVID-19 or lack of childcare because of COVID-19
• Have had a job offer rescinded or a job start date delayed due to COVID-19
• Experiencing adverse financial consequences due to an individual or the individual’s spouse’s finances being affected due to COVID-19
• Closing or reducing hours of a business owned or operated by an individual or their spouse due to COVID-19

[DGKthe1]

I do not get the prompt "Tell us if any of these uncommon situations apply" screen when entering or editing 1099-R entryies. Am unable to proceed with CARES Act considerations. How can I proceed to indicate the amount of withdrawal that I wish to indicate as income for 2021 and 2022?  

[SamS1]

Its coming soon.  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.

[shatherley874]

Have the new 8915-E forms been added to Turbo Tax yet?  If so, how do I amend my 1099 submission to get the questions for review?

[LinaJ2020]

Yes, form 8915-E has been finalized and released.  Just makes sure to update your program by following these steps:

• If you are using the TurboTax CD/Download software program, open TurboTax and select Check for Updates from the Online menu near the top.
• If you are using the online version, it's an automatic update when you sign in and out. 

Since you have already submitted your tax return, you will have to wait until the IRS accepts or rejects your return. You cannot return to the program to make any changes before that. 

If your return got rejected for whatever reasons, you can return to the program to include the 1099-R along with other changes.  You do not need an amendment 1040-X.

If your return has been accepted, you will have to amend your return by filing a form 1040X.  You should not try to amend your return until it has been fully processed and you have received your refund or your payment has cleared.

Beginning with the 2019 tax year, you can e-file amended tax returns. If you used TurboTax to prepare Form 1040-X, follow the software's instructions to e-file the amendment.

To see how to amend your taxes, click here: 

Steps to amend in TurboTax

How to file amendment

If you are under age 59 1/2, the distribution from the retirement plans and IRAs is considered as an early withdrawal.  Generally, you will pay both regular tax plus an additional 10% penalty of your entire distribution unless you met certain criteria.  Due to the CARES Act, if your retirement distribution is related the Covid-19, you will not be liable for this additional penalty.  You will still pay the normal taxes like your wages and income.  For more information from the IRS, click here: Covid Relief.  If your distribution is not related to the Covid, you will need to pay the penalty. 

[shatherley874]

I have not submitted my return yet, awaiting the inclusion of the 8915-e changes.  I have updated TT multiple times including again today, and still don't see it.  I have looked in the Search Topics, as well I don't receive any COVID related questions when I go back through the 1099 distribution portion of TT.  I'm sorry for these additional questions, what am I missing here, please let me know!

Have a great day!

[DaveF1006]

It depends.  It should be there. In fact, I have tested my software to see if this is updated and I have success.

1. Go to federal>wages and income>all income
2. Retirement plans and Social Security>show more 
3. Ira (401K), pension plan Withdrawals(1099R) Start
4. Here you will enter your 1099R.  After you are done with one and reach a summary screen, there will be an opportunity to enter more 1099's.
   1.  Here you will select the first choice 
   1. I took out this money because of a qualified disaster (includes COVID-19)
   1. Scroll through the next few screens until you reach a screen that says is this a withdrawal due to COVID-19 or a Qualified Disaster Distribution?
   2. You will say yes, this was withdrawn due to COVID 19
   3. Next screen says COVID-19 distribution Here you will indicate that all or some was a COVID 19 withdrawal.
   4. Next will ask about your COVID related stuff.  There is a checkbox that you must answer saying that you were financially impacted by COVID 19. This will waive the early withdrawal penalty.
   5. Then it asks if you repaid the distribution, you can say no unless you did.
   6. Then it asks if you want to pay the tax all the tax this year. leave the check box blank and continue.
   7. This will generate a 8915-E and will spread your taxable amount over a three-year period automatically.
   8. If using Turbo Tax Software, go to the forms mode and look at your  8915 to see if there is a reduction difference between line 16 and 17 of that form
   9. if you continue to have issues, please contact tax support at 1-800-446-8848 so they can look at your screen to pinpoint issues you may be experiencing.

[shatherley874]

Thank you.  I had to go back and edit the 1099 that I had previously entered.  I had never tried that.  The net effect is the same, but at least I was able to go in and put in the answers to the questions.

Thank you for your reply!

[fowlk1kd]

Can someone confirm that this works with TurboTax on the Mac?

[MarilynG1]

Form 8915-F for reporting Covid-related retirement plan distributions is scheduled for 3/24/22.

Click this link for more info on Form 8915-F.

Here's a list of Federal Form Availability for MAC.