turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

remimber
New Member

When doing my taxes via TurboTax, why is my early withdraw of my 401K being 10% penalized when I qualified for the CARES Act exception when I withdrew?

IRS Notice 2020-50 states: "If you needed to take money out of your retirement plan, keep in mind that the 10% early withdrawal penalty may be waived on up to $100,000 of retirement funds withdrawn if you are a qualified individual impacted by coronavirus. You are a qualified individual if:

    You, your spouse, or dependent are diagnosed with COVID-19
    You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
    You had hours reduced due to coronavirus
    You are unable to work due to your child care closing or reducing hours

Additionally, income attributable to such distributions would be subject to tax over three years, and you may recontribute the funds to an eligible retirement plan within three years without regard to that year’s cap on contributions."
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Reply

When doing my taxes via TurboTax, why is my early withdraw of my 401K being 10% penalized when I qualified for the CARES Act exception when I withdrew?

The IRS has not yet released the form that handles this, and they have not said when they will do so. Please check back next week.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies