Why isn't Turbo tax allowing me to divide my covid withdrawal over 3 years?

[shamed798]

Why is turbo tax charging me a penalty for my covid 401k withdrawal?

[macuser_22]

Because that form is not available yet.

See below for a link to sign up for an email when the form is ready.

This form is necessary to report COVID related distributions from IRA's and other retirement plans to report the distribution, pay it back over 3 years or spread the tax over 3 years.

A COVID-19 related distribution is reported on a new 8915-E form that is not yet available and there is no estimated release date since the form is still in the draft state at the IRS.

The IRS has announced that the 8915-E for will NOT be e-fileable, but has offered two alternatives to allow e-file with attachments. Whether TurboTax will implement either of these is unknown at this time.

The draft paper form 8915-E is here:

https://www.irs.gov/pub/irs-dft/f8915e--dft.pdf
https://www.irs.gov/pub/irs-dft/i8915e--dft.pdf

Also to see if you qualify for a COVID-19 related distribution see:
https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-...

See this TurboTax FAQ to sign up for an e-mail when the form is ready.
https://ttlc.intuit.com/community/tax-topics/help/why-am-i-getting-getting-a-10-penalty-on-my-1099-r...

[Mommyof3]

Did you say the form 8915E may bot be efiled? If this true why can't i just efile now cause I'm not being penalized at all  my 1099R code is 2 so it didn't penalize me  

[macuser_22]

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@Mommyof3 wrote:

Did you say the form 8915E may bot be efiled? If this true why can't i just efile now cause I'm not being penalized at all  my 1099R code is 2 so it didn't penalize me  

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The code on the 1099-R is not the determining factor, it is whether the distribution itself was only allowed because of the CARES act.   If you could have taken the distribution anyway then the 1099-R is all you need to file.   Only if you need the 8915-E form to claim a COVID related distribution  will you need it.

[Nate93]

Could i just divide my taxable income by 3 and manually enter that in BOX 2a and use the same 1099-R for the next 3 years?

For example, My taxable income is $5025 in BOX 2a, if i input $1675 for the next 3 years will i be ok?

[macuser_22]

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@Nate93 wrote:

Could i just divide my taxable income by 3 and manually enter that in BOX 2a and use the same 1099-R for the next 3 years?

For example, My taxable income is $5025 in BOX 2a, if i input $1675 for the next 3 years will i be ok?

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No.  That is done on the 8915-E just for that purpose.

The TurboTax 8915-E should be available on Feb. 24.

See below for a link to sign up for an email when the form is ready.

This form is necessary to report COVID related distributions from IRA's and other retirement plans to report the distribution, pay it back over 3 years or spread the tax over 3 years.

A COVID-19 related distribution is reported on a new 8915-E form.

See this TurboTax FAQ to sign up for an e-mail when the form is ready.
https://ttlc.intuit.com/community/tax-topics/help/why-am-i-getting-getting-a-10-penalty-on-my-1099-r...

[quickquestions]

Hi,

So once the e-file is ready on 2/24, Turbo Tax will have a CARES Act checkbox (or yes/no question) in the IRA section, I assume?  Something to indicate that the distribution is COVID related and Form 8915-e will be used?  Currently nothing like that there, so just wanted to confirm.  

Thanks!

[macuser_22]

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@quickquestions wrote:

Hi,

So once the e-file is ready on 2/24, Turbo Tax will have a CARES Act checkbox (or yes/no question) in the IRA section, I assume?  Something to indicate that the distribution is COVID related and Form 8915-e will be used?  Currently nothing like that there, so just wanted to confirm.  

Thanks!

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Like the rest of us - you will have to wait ans see how TurboTax implements this.  (The online version already has a (was this a disaster related distribution button that only says to wait for the forms).

[quickquestions]

Ahh, thanks.  The download version does not have that yet.  At least not that I see. 

[lauralynn245]

Any update on this? Has anyone had any success completing this process? I tried today but nothing changed prompting me to reduce the taxable income. 

[macuser_22]

The online version was updated today but there appears to be a problem with the desktop update so it has been delayed to tomorrow.

[DaveF1006]

The latest update is that form 8915-E will be available tomorrow, 02/26. If you haven't signed up to be notified because of the update, please do it here in case if the date gets extended again. 

[fanfare]

@macuser_22 

I tried the Online version

A) it doesn't appear to spread the tax over three years.

B) it comes up with a taxable amount after a partial rollover of the distribution that  I don't understand.

C) it gives contradictory  verification messages about the 1099-R taxable amount box 2a

[macuser_22]

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@fanfare wrote:

@macuser_22 

I tried the Online version

A) it doesn't appear to spread the tax over three years.

B) it comes up with a taxable amount after a partial rollover of the distribution that  I don't understand.

C) it gives contradictory  verification messages about the 1099-R taxable amount box 2a

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I have not really played with the online version much other than to verify that a code B will not get the necessary questions.  I am waiting for the desktop update for testing.

[Alovera18]

We have two 1099-r and the Covid question comes up for my husbands 401k but does not come up for my Roth 403b. I’m not understanding why? Any help is appreciated.