Paid back 2/3's of money withdrawn from 401K for covid hardship withdrawl in 2020. How do I represent this for year 2021 taxes so I no longer owe taxes on the 1/3 from 2021?

[SprnklmeTT]

Hello,

I took out a Covid Hardship withdrawl from my 401K in 2020 and elected to divide the tax liability over tax years 2020, 2021, and 2022. I jpaid back 2/3 of this distribution in 2022 and now would like to amend my 2021 tax return to remove the federal and state taxes and penalties that I owe. How do I amend and refile my 2021 tax return to indicate that I have repaid this distribution so my tax liability and penalties will be removed for that year?  

Thank you

[Critter-3]

See this TurboTax support FAQ for amending a tax return - https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-return/amend-change-correct-return-a...

[fanfare]

Assuming you made a timely repayment in 2022 (See Instructions)  your 2022 tax return should show a repayment of 2/3, only 1/3 of which is useable. The remaining excess repayment of 1/3 can be carried back to 2021.
Also, instead of carrying that portion of the excess repayment back to 2021, you can choose to carry it back to 2020.

Step 2. Add this sentence. Enter "$_______
carryback from [enter here the year the excess carryback
occurred] Form 8915-[E or F, as applicable]" on the dotted
line to the left of the line on which you are including the
carried back amount.

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did you have penalties?

Subtract any penalty from the amount you owe reported on original 1040.
Don't try to include, but ignore, any new or changed penalty.
IRS will calculate your new penalty on their own and will bill you.
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Good Luck!

@SprnklmeTT