1099-R Withdrawal

josiah316 — Wed, 31 Mar 2021 18:41:37 GMT

1099- R

I withdrew about $4,000 from my old company's simple IRA under the Cares ACT provision, when money was tight this summer, after getting my wages cut. I thought this meant that I had 3 years to return that $4,000 to a similarly taxed retirement account. I received my 1099-R Showing the Gross Distribution of $4,000 for this year. My question is:
Do I have to pay taxes on this 4,000 this year or can I return the $4,000 to a different retirement account before I file this year?
If so how do I return the money, is there a form I need to file for this or do I simply speak with my employer or bank?

Re: 1099-R Withdrawal

RayW7 — Wed, 31 Mar 2021 18:50:07 GMT

The newly enacted economic stimulus package allows those negatively affected by COVID-19 to borrow up to $100,000 from their 401(k) and IRAs without penalty. It also allows the borrower to pay the taxes on that withdrawal over three years rather than all at once.

If you, your spouse or a dependent has been diagnosed with COVID-19, this "free pass" and "tax extension" applies to you.
It can also apply to those who are facing financial hardship due to the pandemic. If you're in this group and need to make the withdrawal, then you should definitely consider this to be an option.

Just enter your 1099-R in TurboTax, go through the interview questions and at the end of the interview you will be given the option to spread out the tax over three years.

-follow these links for additional information-

Managing Your Retirement Account and Taxes ... - TurboTax

An Early Withdrawal From Your 401(k ... - TurboTax

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1099-R Withdrawal

Re: 1099-R Withdrawal