topic Corona Related Distribution in Retirement tax questions

Corona Related Distribution

mrjcrittenden — Sun, 21 Feb 2021 19:25:14 GMT

My 1099R box 7 lists my distribution as 1. According to the IRS web page, “a qualified individual may treat a distribution that meets the requirements to be a coronavirus-related distribution as such a distribution, regardless of whether the eligible retirement plan treats the distribution as a coronavirus-related distribution.”

When I leave it as 1, and tell turbo tax it was for corona virus, they still say I owe the 10% penalty. When I change it to 2, and tell turbo tax it was for corona, it says I don’t have to pay the 10%.

Since according to the IRS I can treat it as corona virus distribution even if my 401k didn’t, is it okay if I just change it to a 2?

Re: Corona Related Distribution

macuser_22 — Sun, 21 Feb 2021 19:27:54 GMT

No it is not OK. The IRS gets a copy of the 1099-R. This must be reported on the new 8915-E form.

The TurboTax 8915-E should be available on Feb. 25 (pending IRS approval by then).

The IRS just finalized the form on Feb 11. TurboTax must now submit their 8915-E software to the IRS for testing to be sure that both TurboTax and the IRS e-file computer are compatible. That process usually takes the IRS 2-3 weeks for approval to release the new form to the public.

See below for a link to sign up for an email when the form is ready.

This form is necessary to report COVID related distributions from IRA's and other retirement plans to report the distribution, pay it back over 3 years or spread the tax over 3 years.

A COVID-19 related distribution is reported on a new 8915-E form.

See this TurboTax FAQ to sign up for an e-mail when the form is ready.
https://ttlc.intuit.com/community/tax-topics/help/why-am-i-getting-getting-a-10-penalty-on-my-1099-r-when-i-withdrew-fund-during-covid-form-8915-e/01/1842324

Re: Corona Related Distribution

mrjcrittenden — Sun, 21 Feb 2021 19:41:53 GMT

Thanks!