Repaid cares act withdrawal in 2023, need to file ammend returns

[Neinhaltt]

Hello all,

I took a $100K distribution out of my 401K in August 2020 and spread the tax burden over 3 years and ended up paying taxes in my 2020 and 2021 returns using the turbo tax software CD.

In January 2023 I paid back the 100K to my 401K.  So I need to amend my 2020 and 2021 taxes to get refund. I have not filed 2022 taxes yet.

I need guidance on how to amend the 2020 and 2021 returns. Will I still need to pay 2022 taxes since I returned the money in 2023 instead of 2022?  Meaning do I need to pay the tax on the 3rd year than file an amended 2022 return?  Please advise, thank you

[DanaB27]

Yes, you will need to amend your 2020 and 2021 tax returns to carry back the excess repayment to 2020 and 2021. Therefore, you will carry back $33,333 to each year. 

You won't pay taxes for 2022 but will have to enter it.

For the 2020 tax return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)"
4.  On the "Your 1099-R Entries" screen click "edit" next to the Form 1099-R for the Covid distribution
5. Continue until the "Did you repay any of this distribution" screen and select "I repaid part of this distribution" and enter $33,333 on the next screen

For the 2021 tax return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Click "Continue" on the “Your 1099-R Entries​​​​​​​” screen
5. Answer "Yes" to the "Did you take a disaster distribution in prior years or repay…" screen
6. Answer "Yes" on the "Did you take a 2020 Qualified Disaster Distribution" screen
7.  Check the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and enter your information.
8. Enter the $33,333 repayment on the "Did you repay any 2020 Qualified Disaster Distribution in 2022?" screen

For the 2022 return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Click "Continue" on the “Your 1099-R Entries​​​​​​​” screen
5. Answer "Yes" to the "Have you ever taken a disaster distribution before 2022?" screen
6. Answer "Yes" to "Did you take a 2020 Qualified Disaster Distribution?"
7. Check the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and enter your information from your 2021 Form 8915-F
8. Enter the repayment on the "Did you repay any 2021 Qualified Disaster Distribution in 2022?" screen

Please see Amending Form 8915-F (2020 Disasters) for additional information.

[Neinhaltt]

Thank you,

When making these changes turbo tax sends me to a page that says "Form 1040-X: Explanation of Changes must be entered."  It says to attach any supporting documents and new or changed forms and schedules.  I did not get any documents from my retirement plan custodian (Fidelity) when I repaid the money back.  I was told that they only send 1099-R forms for distributions and not repayment.

Is it enough for me to explain the situation (i.e. I paid the money back) or do I need to attach other documentation like a copy of the cashier check I sent to Fidelity and/or a copy of the  "Recontribution of CARES Act Distribution(s) (Rollover Contribution Form) " that I sent along with my check?

Thank you.

[DaveF1006]

First of all, prepare your amendment and see if you can efile your amendment. If there is any additional  supporting documentation that needs to be sent after the efile, Turbo Tax will instruct you to send this with a 8453 form (that Turbo Tax will generate) that will be mailed to a mailing address that Turbo Tax will provide you.

If you are allowed to efile without restrictions and if you are not instructed to send the 8453, you do not need to do anything additional at this point.

Let us know if you are successful in efiling your amendment.

@Neinhaltt  

[Neinhaltt]

Hello turbo tax tells me E-filling is closed so can't e-file anymore.  Printing my amended return and shows these instructions for the federal return:

Since no amended 1099 I just wrote, "Repaid Cares Act retirement withdrawal made in August 2020 in January 2023.  Filing amended returns for 2020 and 2021 to receive refund on taxes paid on it."

This is the instructions for the state return:

Per these instructions do I need to attach my 2020 W-2 then?  Do I also need to attach a copy of my 401K statement in January that shows the repayment?

Thank you.

[DaveF1006]

Yes, include the copy of your 2022 W2 and a copy of your 401 Statement to prove the repayment amount. The IRS likes paper trails such as these.

@Neinhaltt  

[sskinner817]

Just want to make sure, it says in 2022 - but we repaid the amount in 2023.  Is that ok?

[MonikaK1]

The last answer said "2022 W-2" but was in answer to a question in the previous post as to whether to include a copy of the 2020 W-2 with the 2020 amended return. 

The original poster in this thread also made the repayment in 2023, so yes, the instructions in this thread apply to that situation.

See the IRS Instructions for Form 8915-F, which include instructions for amending prior year returns, for more information.