Early withdrawal COVID19 for California filer

[rkong79]

Under the CARES Act, we are able to spread the tax liability over 3 years.  When I get to the CA state tax portion, it appears that we have to adjust back to the total distribution amount for tax purposes.  Does CA allow for spreading the tax liability over 3 years as under federal rules?

[JoannaB2 · Accepted solution]

The form 8915  (Qualified 2016 Disaster Retirement Plan Distribution and Repayment is used by individuals who were adversely affected by 2016 disaster and received a distribution that qualifies for a favorable tax treatment  You may repay all or part of the corona virus-related distribution to an eligible retirement plan over a 3 year (2020, 2021, & 2022) period after the date distribution was received.  You must qualify for IRS special tax rules under Cares Act: 

• You are diagnosed with the SARS-Cov2. 

• You are a spouse or a dependent of a person diagnosed with the virus. 

• You experienced financial hardship related to the virus. 

• Test must be done with an approved Center for Disease Control and Prevention. 

California conforms to federal laws including a temporary waiver of the required minimum distribution requirement.

See, california conformity with IRS's 2020, link.