topic Does anyone know how to waive the penalty on a 401k early withdrawl on turbotax due to covid 19 ? in Retirement tax questions

Does anyone know how to waive the penalty on a 401k early withdrawl on turbotax due to covid 19 ?

fctoync38 — Sat, 27 Feb 2021 19:16:38 GMT

I answered the questions if I was affected by a disaster in 2020 and it doesnt mention Cares Act .

Re: Does anyone know how to waive the penalty on a 401k early withdrawl on turbotax due to covid ...

DanaB27 — Sat, 27 Feb 2021 19:31:16 GMT

Please follow these steps to enter your 1099-R to get the COVID related questions:

Login to your TurboTax Account
Click on the Search box on the top and type “1099-R”
Click on “Jump to 1099-R” and enter your 1099-R (if you started this before you should see the “Your 1099-R Entries” screen and will click "edit")
Continue until "Tell us if any of these uncommon situations apply" screen
Select "I took out this money because of a qualified disaster (includes COVID-19)"
Continue through the questions

If this does not work then please let me know what code you have in box 7. What is in box 1 and box 2a?

Re: Does anyone know how to waive the penalty on a 401k early withdrawl on turbotax due to covid ...

fctoync38 — Mon, 08 Mar 2021 04:50:16 GMT

Hi,box 7 had the number 1 and I changed it to a number 2 which let me proceed with the question qualified disaster.Box 1 is $9163.00 same in box 2a. Even though box 7 had a 1 , is it ok that I switched it to the number 2 so it would let me continue with completing my taxes?

Re: Does anyone know how to waive the penalty on a 401k early withdrawl on turbotax due to covid ...

DanaB27 — Mon, 08 Mar 2021 14:04:32 GMT

Please enter the correct code in box 7 as shown on your Form 1099-R.

What error are you getting if you use code 1 in box 7? I couldn't recreate an error using code 1 in box 7.

Re: Does anyone know how to waive the penalty on a 401k early withdrawl on turbotax due to covid ...

fctoync38 — Tue, 09 Mar 2021 00:17:43 GMT

When I changed box 7 back to 1 it automatically changes the fed tax due from $630. To $1546. So I don't think it will let me drop the ten percent penalty under code 1 box 7. I am on turbotax deluxe.

Re: Does anyone know how to waive the penalty on a 401k early withdrawl on turbotax due to covid ...

PattiF — Tue, 09 Mar 2021 00:26:04 GMT

Here is some information from TurboTax about this situation.