Why isn't Turbo tax allowing me to divide my covid withdrawal over 3 years?

[macuser_22]

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@Alovera18 wrote:

We have two 1099-r and the Covid question comes up for my husbands 401k but does not come up for my Roth 403b. I’m not understanding why? Any help is appreciated. 

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As I said above, there is a bug in the online version  that is ignoring a code B on box 7 on a 1099-R.

[dj-goodman]

I'm having the same issue. My husband took a distribution from his 401k, but it came from both a pre-tax account and a Roth IRA. He received two 1099-R, and like you mention, one has a "B" code on box 7. Any updates on when this might get solved?

[taxwhiz1]

I'm having the exact same issue right now. Just spent 2 hours on the phone with a tax representative through turbotax live that didn't know how to fix the issue. I'm now waiting for a callback (~30 mins)  from the product support team. Will update. It seems that they haven't built the flow that recognizes Roth early distributions (code B1) as being eligible for the COVID relief form (8915-E). Specifically, it seems that code B1 withdrawals that relate to COVID-19 should be reported in box 3a on the 8915E, but the platform currently doesn't have that flow. Will update.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

[macuser_22]

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@taxwhiz1 wrote:

I'm having the exact same issue right now. Just spent 2 hours on the phone with a tax representative through turbotax live that didn't know how to fix the issue. I'm now waiting for a callback (~30 mins)  from the product support team. Will update. It seems that they haven't built the flow that recognizes Roth early distributions (code B1) as being eligible for the COVID relief form (8915-E). Specifically, it seems that code B1 withdrawals that relate to COVID-19 should be reported in box 3a on the 8915E, but the platform currently doesn't have that flow. Will update.

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There is currently a bug in the online versions of TurboTax (desktop works fine) that ignores the COVID questions for a 1099-R with a code "B" on box 7.    This has been reported.

[taxwhiz1]

Thanks for the information.

Do you have any sense of when this will be fixed? The callback just hung up on me after ringing once.

[macuser_22]

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@taxwhiz1 wrote:

Thanks for the information.

Do you have any sense of when this will be fixed? The callback just hung up on me after ringing once.

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No,   Probably several weeks.

User dmertz posted the following workaround for the Online version 1099-R code B bug.

In online TurboTax a workaround is needed to get around the flaw in TurboTax that prevents it from asking if the distribution is COVID-19 -related when there is a code B in box 7. Enter the Form 1099-R as is but omit the code B, enter only code 1, 2 or 7 (If box 7 has only code B, temporarily enter code 7 instead). Complete the follow-up questions, then, when you reach the Review Your 1099-R Info page, edit this 1099-R and add the code-B selection. The COVID-19-related information will remain even though you won't have access to those questions with the code B present.

[taxwhiz1]

Great! Thanks for reposting the workaround.

[taxwhiz1]

Do you think that workaround will put the Roth disbursement information in the correct box on form 8915-E, though? It seems that without the B, the platform will just recognize the disbursement as one from a non-Roth account (the B denotes that it's from a Roth account). I believe disbursements from a Roth account are supposed to go on a separate line on the 8915-E form (3 instead of 1). 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

[macuser_22]

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@taxwhiz1 wrote:

Do you think that workaround will put the Roth disbursement information in the correct box on form 8915-E, though? It seems that without the B, the platform will just recognize the disbursement as one from a non-Roth account (the B denotes that it's from a Roth account). I believe disbursements from a Roth account are supposed to go on a separate line on the 8915-E form (3 instead of 1). 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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A code "B" is a designated Roth  in a separate account in a 401(k), 403(b) or governmental 457(b) plan and is NOT an Roth IRA - it goes on line 1.

[taxwhiz1]

Oh - great point. Thanks

[twentytwentyhindsight]

The 8915-E form and instructions are now available at the IRS website.  However, the instructions for  federal disaster withdrawals and/or contributions in 2018 or 2019 (forms 8915-C and 8915-D) are still just drafts.  If only retirement withdrawals/contributions occurred in 2020 covid disaster, then shouldn’t form 8915-E be sufficient to file 2020 taxes? Also, do all Turbo Tax version handle the 2020 CARES Act withdrawals?

[DoninGA]

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@twentytwentyhindsight wrote:

The 8915-E form and instructions are now available at the IRS website.  However, the instructions for  federal disaster withdrawals and/or contributions in 2018 or 2019 (forms 8915-C and 8915-D) are still just drafts.  If only retirement withdrawals/contributions occurred in 2020 covid disaster, then shouldn’t form 8915-E be sufficient to file 2020 taxes? Also, do all Turbo Tax version handle the 2020 CARES Act withdrawals?

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Yes, the Form 8915-E is sufficient.  And yes, all the TurboTax editions handle 2020 CARES Act withdrawals.

[twentytwentyhindsight]

This IRS link below offers methods for e-filing by E-Filing services: 

https://www.irs.gov/forms-pubs/alternative-filing-method-for-e-filed-returns-that-include-form-8915-...

So it would be up to Turbo tax to make the forms upload-able to with completed 2020 Tax filing or something similar.

[macuser_22]

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@twentytwentyhindsight wrote:

This IRS link below offers methods for e-filing by E-Filing services: 

https://www.irs.gov/forms-pubs/alternative-filing-method-for-e-filed-returns-that-include-form-8915-...

So it would be up to Turbo tax to make the forms upload-able to with completed 2020 Tax filing or something similar.

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Those methods are not necessary because the 8915-E form is e-file able since Feb 26.
8915-C and -D are scheduled for 3/25 due to IRS delays in getting the 2020 e-file schemas ready.   

[Anonymous]

Hi there,

Am I correct that this still hasn't been fixed (besides what I see in the workaround)? I have signed up for the email updates but didn't see anything for the initial upload before the bug was found. Thanks!