Form 8915E Coronavirus distributions

[jba3]

In 2020 I took a 45K loan on my 401K, filled a 8915E form Line 1 - $45000. Line 11 - $15000 also selecting a 3 year payback incase I was laid off before I could repay. I was laid off in 2021 with a total distribution in 2021 of  $36549. with a payback to my loan up to that point in 2021 of $4395.00.

Questions:

In 2020 did I pay tax back from my return for the 15K amount listed on line 11?

Is there any way to split the $36549 into the final 2 years lowering my tax basis for 2021?

[AmyC]

Can you better clarify what was 1099-R income and when along with how the money is related? You would not have gotten a 1099-R for a loan. You would get a 1099-R for a loan amount that you can't pay back, the 2021 distribution from job loss. Is this all a part of the same $45k? It sounds like this is partially the same money and already being spread out.

[jba3]

The 1099-r was from the amount of the loan I was unable to repay (36k) . Initially I believed I would be laid off in 2020 and took the loan for 45K expecting to immediately be let go. Turns out I was lucky enough to stay at the job until early 2021. I knew going into the transaction there would be a tax burden and just wanted to spread it out over 3 yrs.  So yes it was all part of the original 45K loan turned to a distribution.

[MaryK4]

Unfortunately, because the loan was a deemed distribution in 2021, you cannot designate a Covid Emergency Distribution (because it expired December 31, 2020) @jba3

[jba3]

Ok that is what I thought, but had to ask thank you. So to my other question, On my 2020 return for form 8915, did I pay any tax from my return for the 15K amount listed on line 11 of the total 45K? Or let me ask it another way, did the 15 K from line 11 increase my total income, thus making it taxable?

[JamesG1]

$15,000 reported on line 11 of the 2020 IRS Form 8915-E was taxed on the 2020 Federal 1040 tax return.

The second payment of $15,000 will be taxed on the 2021 Federal 1040 tax return.

IRS Form 8915-F information can be entered at the screen Did you take a 2020 Qualified Disaster Distribution?  In TurboTax Online, follow these steps.

• Go to Federal / Wages & Income / Retirement Plans and Social Security / IRA, 401(k), Pension Plan Withdrawals (1099-R).
• Click Start / Revisit to the right.
• At the screen Did you receive any 1099-R forms? select No.
• At the screen Have you ever taken a disaster distribution before 2021?, Click Yes.
• At the screen Did you take a 2020 Qualified Disaster Distribution?, enter 8915F and 8915E information.

[fanfare]

a 401k loan is not a covid-19 related distribution from your plan.

you are confounding the two.

if you left the company, the loan balance becomes taxable income.

Your 1099-R code should be "L"

Can you then turn around and say, "this is a covid-related distribution" ?

I don't think so,  (my tax software won't let you do it)

Maybe you'll get away with it with TurboTax ?.