State CARES Act conformity regarding COVID 19 distributions

Forum|Forum|5 years ago
February 26, 2021
2 replies
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If so elected by the user for Fed, will Turbo Tax automatically spread the proceeds of a COVID-19 distribution over three years on the individual’s state return for those states that have adopted rolling conformity with the IRC?

TurboTax Deluxe Online

Best answer by JotikaT2

That worked for federal. But it’s not working for state. I’m in ny. I spent hours on the phone yesterday to do what you explained and fixed federal but it won’t allow me to continue bc that error message comes up and says they are still continuing to work on the issue. So I’m assuming it’s a state issue and not turbo tax.

Please see the information in the link below for an update on the state returns.

Form 8915-E state returns update

TheMugzzy

Level 2

I am wondering this also. It is not letting me finish my state return

AmyC

Level 15

Many states begin with the federal AGI. Those would automatically have the correct distribution. For the others, the program will pull it through. You must have filled out the 8915-E and marked that you were affected by COVID.

In addition, you have those same 3 years to repay the money. So you may be able to repay some of it in the next 2 years and not have to pay the full tax on your distribution.

Federal just finished the form so some states may be still trying to incorporate it into their system.

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TheMugzzy

Level 2

Only issue is I keep getting this error and can't file.

Hadar

Level 4

You will not have to file an Oregon return for 21 and 22 since it was already included.

The 1/3 distribution income will be included on your 21 and 22 federal and state tax returns so they will be included on your New York tax returns, but you will get a credit for tax paid in other state (Oregon) on your subsequent New York tax returns (1/3 for each year to offset the income.

[Edited 02/27/2021 | 8:47 PM PST]

@Hadar

Is this additional form to report and pay back the prorated tax a Federal form? Does it keep the coronavirus 401k distribution portion of my income off of my Federal AGI in 2021 and 22?

More importantly, will this form keep that distribution income away from NY State? That's the focus of my issue: sheltering the 401k distribution received in Oregon from NY State over the next 2 tax years.