How do I spread my retirement money over 3 years The income from that I pulled out during Irma?

[DanO · Accepted solution]

The IRS does allow for the taxes owed on the IRA distribution to be spread over a 3 year period with the first being the year the distribution was received.

You can enter your 1099-R in TurboTax and account for the spread of taxes in this manner.

• Sign into TurboTax
• Click on Take me to my return
• Go to Search at top right and enter 1099-R
• Click on Jump to 1099-R
  
• Click on yes for Did you have any of these types of income in 2017? and then Continue
• Click on I'll type it in myself
• Click on Form 1099-R and Continue
• Add your 1099-R information as it appears on the form and click Continue
• Continue through interview and enter Yes for Was this a Qualified Disaster Distribution? and Continue
• Continue with interview until you get to,  Do your want to pay tax on the entire 2017...click Continue
• Finish up interview

Once done with the 1099-R entry you can go out to see the the taxes is accounted for properly by:

• Click on Tax Tools in left column
• Click on Tools under Tax Tools
• Click on View Tax Summary in Tools Center
• Click on Preview my 1040 and scroll down to line 15b, you should see 1/3 of your distribution as taxable
  

[Zray661]

I need to know how to do this for a coronavirus withdraw. 

[67mikehall]

What he said works for IRMA. Do not do that for covid withdrawals. Final IRS guidance has not been issued, but the safest route would be to report 1/3 of your income each year for the next 3 years and pay taxes on it that way. See this article for more info:

https://www.barrons.com/articles/how-to-manage-the-taxes-on-a-covid-related-withdrawal-from-your-ira...

[macuser_22]

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. There is no telling how long it will take the IRS to make the electronic form available.

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...

[JMJ1338]

If I elect to spread my taxes over 3 years  and I use turbo tax everyyear will it automatically remember to do it for me or will I need to remember or get a new 1099R each each year for 1/3?  Also what happens to the taxes I had withheld on the withdraw, does that spread over 3 years and auto calculate or all accounted for on the first year?

[TaxMomof2boys]

Hello, JMJ1338,

I have the same exact questions.  Did you ever get answers?  Thank you so much.

[ColeenD3]

You would enter the information in the 1099-R Retirement Section.

Follow these steps to report any further tax to be paid:

1. Login to  TurboTax 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R”
4. If you do not have any 2021 1099-R answer "No" to "Did you get a 1099-R in 2021?"
5. Answer "Yes" to the "Have you ever taken a disaster distribution before 2021?" screen.

You will be guided through the screens.

Form 8915-F is used to report a disaster-related retirement distribution, and any repayments of those funds. It also allows you to spread the taxable portion of the distribution over three years, if needed and report prior year distribution amounts which are to be taxed in 2021.

We'll complete and include Form 8915-F with your return if you qualify. Just enter your Form 1099-R and answer a few questions to determine your eligibility.

Note: Form 8915-F replaces Form 8915-E and will become available later in the tax season.

To qualify for Form 8915-F and to be exempt from the early withdrawal penalty a few rules must be met:

1. The withdrawal had to come from an eligible retirement plan, which could be any of the following:

• A qualified pension, profit-sharing, or stock bonus plan (including a 401(k))
• A qualified annuity plan
• A tax-sheltered annuity contract
• A governmental section 457 deferred compensation plan
• A traditional, SEP, SIMPLE, or Roth IRA

2. The distribution must be to an eligible individual.  That is a person who was affected while living in a federally declared disaster area. This doesn't include any area which was declared to be a federal disaster area only because of COVID-19.

There is also a $100,000 distribution limit to the exemption. Any distributions over that amount, may be subject to the additional tax.