NY COVID distributions delay

[nmb10605]

@krish008 Thanks for the information!  Clearly Intuit is confused about this issue, or has outdated information about NY state tax code regarding covid-related withdrawals from IRAs.

I already e-filed my federal tax return, but have been waiting to file my NY state return due to the issue with my covid-related withdrawal from an IRA.  I may give TT a couple of weeks to see if they update their software.  If that doesn't work, I like your workaround!  Much appreciated.  

[enve123]

legend. thank you!

[poncepr16]

@krish008 so i understand what ur saying in regards to changing the amount but u said not to put it as covid distribution if u do that wont you get the penalty or is the penalty a federal thing only ? And you have to remember the exact amounts to claim the next 2 yrs it might go through but it might also be flagged sounds like a good idea 

[poncepr16]

@krish008 ok so i submitted just like you did it went through and to my understanding the taxable amount is given to the state by the Federal so with submitted the federal then making the edits to the amount just made it correct info that we gave to the state i hope it gets accepted 

[byoung999]

I spoke with an customer service today & she said there is going to be another update to fix this on 3/19.  I can only hope this update will actually fix the issue.

[DawnC]

You should not change anything on your Form 1099-R when entering it in the federal section.  You should enter the 1099-R into the federal section and allow TurboTax to transfer the amounts to the state forms.   You may end up paying penalties or taxes that you are not required to.   Also, when you go to file next year's returns, you won't be starting with accurate data.  When electing to spread the tax over 3 years in the federal section, keep in mind, that each state handles these transactions differently.    There will be an update to deal with the federal and state differences, but changing amounts you enter on the federal will almost certainly cause a reconciliation issue on future returns.   

[enve123]

@DawnC  I find it hilarious that TT has 0 idea when they're going to fix their bug but here you are telling folks to not try this persons method which will 100% work for this year and the next year returns as long as they remember the values to put in. Not to mention that there is almost 0 chance of anyone who has had to deal w/ this who is planning to actually use the TT software next year because of this terrible service and communication..... 

[krish008]

Lol, @enve123 I resisted the urge to say exactly what you said:) 

For anyone reading- As I mentioned, do not do this before you have submitted your federal taxes and they have been accepted. Obviously you want to be able to claim covid hardship with them to get the benefits. As soon as those are accepted by the IRS, you can do what I suggested. If for some insane reason you plan on using TurboTax again in the future, you can then go back in and change the federal responses to what they originally were, once your state return has been submitted and accepted (which mine just were- so my method worked!).

Just as an FYI, in terms of taking money out of retirement, the early withdrawal penalty is a federal thing, not a state thing. 

[krish008]

Mine got accepted today- so it took a little over 24 hours. Basically the software has the federal forms feed into the state calculations. The actual IRS doesn’t give anything to the state. So you just need the math to work out.

[krish008]

The penalty is a federal thing, so make sure that you have done the federal part correctly, that it has been submitted and accepted. Once that is accepted you can go in and do what I suggested, because it basically makes the form feed in to the state calculations. Yes, you will have to remember the numbers, but you should also have a 1099 from the retirement account that lists the whole dollar amount and it will just be a third, or whatever amount was taxed this year. 

Of course all of the this gets more complicated if you plan on repaying these funds, and I don’t know yet how those calculations work.

[poncepr16]

@krish008 i did ur suggestion and submitted the state it was accepted and then what i did was i put the numbers back to the way they were and saved it the correct way so if i decide to use Turbo tax again which i doubt everything is saved the correct way thanks for the suggestion and since the federal gives the state the amount with the correct info in the 1099r it will just calculate again automatically thanks again maybe u should work for turbo tax lol

[susiedoody]

@krish008  thank you for that very thorough and researched answer. I have been frustrated by this for weeks.  I may give turbo tax another week to fix it, and then I will do as you suggested.  I already filed my federal taxes.  Thank you again for taking the time to explain this.  

[susiedoody]

@DawnC thank you for that clarification.  This whole issue has been very frustrating. I will wait and hopefully turbo tax will fix this by the 19th

[Curtid33]

NY is ready, no problems now. Just e-filed

[joeyhimura]

some of us who already e-filed  federal a few weeks ago are getting different error message now, and still not able to e-file NY