Why isn't TurboTax recognizing a covid related 403b early disbursement?

[CatinaT1]

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.  

IRS forms availability table for TurboTax individual (personal) tax products

Additionally, the IRS will not start processing returns until February 12, so waiting for this form is not slowing down the processing of your return.

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

[kkar1978]

So I now see the form listed as "unsupported". What do I do next?

[CatinaT1]

Where are you seeing it listed as unsupported?  It may be because the IRS hasn't finalized the form yet.

[kkar1978]

Actually, after double checking, it is the 8915-A that reads unsupported. The 8925-E isn't even listed yet. Once it's finalized will it be supported in turbotax e-file? We are moving in March and I wanted to file and hopefully get my return for expenses, hence why I might seem a little antsy.

[CatinaT1]

We won't know until the IRS finalized the form and guidance.  

[kkar1978]

So I received a email saying that the 8915-E will be ready for e-file today, but when I go into the turbotax app to work on the early disbursement the options haven't changed and instill owe the extra 10%. Is the form not ready yet, or am I doing something wrong?

[DoninGA]

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@kkar1978 wrote:

So I received a email saying that the 8915-E will be ready for e-file today, but when I go into the turbotax app to work on the early disbursement the options haven't changed and instill owe the extra 10%. Is the form not ready yet, or am I doing something wrong?

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Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments is scheduled to be available in TurboTax on 02/25/2021

Go to this website for IRS forms availability in TurboTax - https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_online_individual.html

[montebach]

My wife and I were laid off due to COVID cutbacks in October 2020. We still didn’t have jobs in early 2021, so she cashed out her small 403b balance in February 2021 (less than $10K) to pay living expenses. 

My understanding is that the Consolidated Appropriations Act extended the CARES act provisions waiving the 10% penalty tax on retirement plan distributions. However, Turbo Tax doesn’t reflect this or have a form to fill out for Emergency withdrawals. Is there a form coming from the IRS for this, too?

[DoninGA]

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@montebach wrote:

My wife and I were laid off due to COVID cutbacks in October 2020. We still didn’t have jobs in early 2021, so she cashed out her small 403b balance in February 2021 (less than $10K) to pay living expenses. 

My understanding is that the Consolidated Appropriations Act extended the CARES act provisions waiving the 10% penalty tax on retirement plan distributions. However, Turbo Tax doesn’t reflect this or have a form to fill out for Emergency withdrawals. Is there a form coming from the IRS for this, too?

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The exception to the 10% early distribution penalty for Coronavirus was only for tax year 2020.  It does not apply for distributions made in 2021.