topic 2021 withdrew 401 k due to jobless and covid in Retirement tax questions

2021 withdrew 401 k due to jobless and covid

kristina-kurtz — Mon, 09 Mar 2026 08:57:22 GMT

What do I file for this?

Re: 2021 withdrew 401 k due to jobless and covid

DoninGA — Sun, 06 Mar 2022 19:50:48 GMT

There are no exceptions on a 2021 withdrawal from a 401(k) for Covid-19 or unemployment. The withdrawal is entered as ordinary income on your tax return and taxed at your current tax rate.

To enter, edit or delete a form 1099-R -

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Retirement Plans and Social Security
On IRA, 401(k), Pension Plan Withdrawals (1099-R), click the start or update button

Or enter 1099-r in the Search box located in the upper right of the program screen. Click on Jump to 1099-R

Re: 2021 withdrew 401 k due to jobless and covid

kristina-kurtz — Sun, 06 Mar 2022 20:08:51 GMT

isnt it covered under CAA ?

Re: 2021 withdrew 401 k due to jobless and covid

kristina-kurtz — Sun, 06 Mar 2022 20:10:12 GMT

Doesnt it qualify for reduction in taxed penality?

Re: 2021 withdrew 401 k due to jobless and covid

DoninGA — Sun, 06 Mar 2022 20:11:27 GMT

@kristina-kurtz wrote:

isnt it covered under CAA ?

Are you inquiring about a Canadian tax return?

If so, this is the TurboTax US user community website.
Go to this TurboTax Canada website for assistance with a Canadian tax return or the TurboTax Canada editions - https://turbotax.community.intuit.ca/community/turbotax-support/help/03/en-ca

Re: 2021 withdrew 401 k due to jobless and covid

kristina-kurtz — Sun, 06 Mar 2022 20:13:05 GMT

No I'm US. the Consolidated Appropriations Act of 2021 (CAA),

Re: 2021 withdrew 401 k due to jobless and covid

DoninGA — Sun, 06 Mar 2022 20:28:25 GMT

@kristina-kurtz wrote:

No I'm US. the Consolidated Appropriations Act of 2021 (CAA),

No that bill does not cover anything concerning a Covid-19 or loss of job exemption for withdrawals from a tax deferred retirement account for tax year 2021.

See - https://en.wikipedia.org/wiki/Consolidated_Appropriations_Act,_2021

Re: 2021 withdrew 401 k due to jobless and covid

kristina-kurtz — Fri, 11 Mar 2022 21:23:12 GMT

In late December, President Trump signed the Consolidated Appropriations Act, 2021 to provide disaster-related tax relief. As part of the law, there's a provision that allows impacted individuals to take a qualified disaster distribution from their retirement accounts. Similar to the withdrawal exemption in the CARES Act, eligible individuals can take up to $100,000 from their retirement accounts, without being subject to the 10 percent penalty that typically applies to early withdrawals. Those who choose to take a distribution can pay the federal taxes over a 3 year period, and have up to three years to repay the distribution amount, starting on the day they take the distribution.

Retirement plan loans taken between December 22, 2020 and within 180 days following the enactment of this bill (June 20, 2021).
Maximum Loan Amount = the lesser of $100,000 OR 100% of the participant’s vested account balance.

Re: 2021 withdrew 401 k due to jobless and covid

DoninGA — Fri, 11 Mar 2022 21:33:01 GMT

@kristina-kurtz None of that is within the bill. The IRS would have included that in the legislated tax code for tax year 2021 if it was legislated through that bill. It was not.