topic Re: Qualified Distribution in Retirement tax questions

Qualified Distribution

dilorenv — Sat, 20 Mar 2021 21:09:21 GMT

I took a $68,000 contribution out of a qualified plan due to COVID 19, I returned the funds within the year, I thought I had three years to do that. Why is turbo tax still applying a taxable to 1/3 of it?

Re: Qualified Distribution

macuser_22 — Sat, 20 Mar 2021 21:45:01 GMT

@dilorenv wrote:

I took a $68,000 contribution out of a qualified plan due to COVID 19, I returned the funds within the year, I thought I had three years to do that. Why is turbo tax still applying a taxable to 1/3 of it?

Be sure to answer the COVID questions and when it asks if funds were returned in 2020 - enter the total amount. If not returned until 2021 then 1/3 will be taxable in 2020.

Re: Qualified Distribution

LenaH — Sat, 20 Mar 2021 21:51:31 GMT

If you repaid all of the funds before December 31, 2020, you will have to enter this information on the page titled Did you repay any of this distribution? I have attached a screenshot below for additional guidance. This screen flows your entry of the 1099-MISC.

To get back to your 1099-R input, please follow the instruction below:

Open your return.
Search 1099-R with the magnifying glass tool at the top of the page.
Click the Jump to link.
Answer all the screens that follow.
When you reach the page Did you repay any of this distribution?, answer accordingly.

On the mock-up return I completed, none of the amount on the 1099-R that was taxable and a Covid-19 distribution (which I later marked as repaid in full) was taxable.