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luperod01
New Member

Where on the tax form would you get the penalty waived under cares act 401k withdrawal due to hardship?

 
3 Replies
HelenC12
Expert Alumni

Where on the tax form would you get the penalty waived under cares act 401k withdrawal due to hardship?

@luperod01 You enter the hardship withdrawal information when you enter your 1099-R into TurboTax.

 

However, you won't be able to enter your COVID-19 related 1099-R just yet.  You'll need to revisit this area. The IRS instructions related to disaster distributions weren't ready in time for us to include them in this release. Please revisit this area later. 

 

  • Type 1099-R in the search bar and select Jump to 1099-R.
  • Continue with the onscreen interview until you get to the Tell us if any of these uncommon situations apply screen, scroll down to I took out the money because of a qualified disaster (includes COVID-19).

 

The 10% additional tax on early distributions does not apply to any coronavirus-related distribution. 

Your 1099-R distribution is taxed over 2020, 2021, and 2022. You’ll have that time to pay back the funds you withdrew, without the amount impacting that year’s cap on contributions, and if you pay back the amount within that time, you’ll be able to claim a refund on those taxes. 

Those who qualify as individuals directly impacted by the pandemic will be able to withdraw up to $100k from their retirement accounts without facing the 10% early withdrawal penalty.

 

You qualify if:

  • You, your spouse, or your dependent are diagnosed with COVID-19
  • You experience adverse financial consequences as a result of being quarantined, furloughed, or laid off
  • You had work hours reduced to COVID-19
  • You’re unable to work due to child care closure or hour reduction

As things change, TurboTax is continually updated and able to handle every situation that arises to ensure your taxes are done right, so you’ll receive your maximum refund.

2020 1099-R Covid 19 Tell us if any of these uncommon.png

 [Edited 2-3/2021|1:10 pm PST added screenshot]

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hashbrowns33
New Member

Where on the tax form would you get the penalty waived under cares act 401k withdrawal due to hardship?

I do not see the screen shot posted to select that this early retirement distribution was related to COVID-19, what do I do?

SamS1
Expert Alumni

Where on the tax form would you get the penalty waived under cares act 401k withdrawal due to hardship?

Its not quite ready yet.  Form 8915-E: Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which is used for COVID-related early distributions, will be e-fileable starting 2/25.  The IRS is updating form 5329’s instructions to make it clear that COVID related exceptions cannot use 5329 and should use the new 8915-E.  Click here to get on the email list to receive and update when the 8915-E is available.  

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