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Level 1
posted Feb 26, 2021 7:38:31 AM

Turbotax is including the full amount of the IRA withdrawal for Covid Cares. I only wish to claim 1/3 of the amount. How do I fix this?

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1 Replies
Expert Alumni
Feb 26, 2021 8:13:47 AM

One of the relief measures for Covid-19 is the option to spread the taxation of your retirement distribution (up to $100,000) over three years.

 

Please read this IRS document for more information.

 

To take advantage of this option, please follow these steps: 

  1. Enter your form 1099-R normally.
  2. After entering your form 1099-R, click Continue until you reach the screen Do any of these situations apply to you?
  3. Check the box which says I took out this money because of a qualified disaster (includes COVID-19).
  4. Click on the radio button Yes this was withdrawn due to COVID-19 and click Continue.
  5. Follow the interview until you arrive at the screen Was this a withdrawal due to COVID-19 or a Qualified Disaster Distribution?
  6. Click on the radio button Yes this was withdrawn due to COVID-19 and click Continue
  7. Follow the interview until you arrive at the screen Does [name] want to pay all the tax this year?
  8. Click Continue and the taxation of your distribution will be spread over three years.