Secure Act First Time Parent Early Retirement Withdrawal Penalty Exemption

[browncp88]

How do I submit an exemption for the Secure Act First Time Parent Early Retirement Withdrawal Penalty in TurboTax?  

Here is some information on the exemption which was passed by Congress in Dec 2019 and goes into effect in Jan 2020.

https://www.jdsupra.com/legalnews/secure-act-allows-parents-to-withdraw-5-3847744/#:~:text=Overview%....

On the 1009-R from my IRA administrator, Distribution Code in Box 7 is equal to 1 (meaning no exemption applied).  When I contacted IRA administrator, they said my tax professional would be the one to qualify my exemption, but I do not see such an exemption listed on the TurboTax form as I filled it out.

[RayW7]

Form 8915-E for Coronavirus Distributions has been released and now available in TurboTax.

First, make sure your copy of TurboTax has been updated to include all the current forms.

You can access all the information needed by revisiting your 1099-R input information. 

During the interview you will have a question 'Was this a withdrawal due to COVID-19 or a Qualified Disaster Distribution'.  Just follow the interview questions and TurboTax will automatically take care of the form 8915-E.

The 1099 R will be entered in the Retirement Plans and Social Security section.
• Select Federal Taxes
• Select Wages and Income
• Select Show More at Retirement Plans and Social Security
• Select IRA, 401(k), Pension Plan Withdrawals (1099-R)

Note: If you qualify the 10% penalty will be removed and TurboTax will provide options for repayment.

-follow this link for additional information-

2020 Stimulus: Tax Relief for This Year's Taxes - TurboTax ...

[browncp88]

I didn't think the first time parent exemption is related to Coronavirus though, am I missing something?

Thanks!

[JeffreyR77]

There is no exemption on the Form 1099-R Form for this exemption.  The exemption will be on the screen following the 1099-R input screen where you indicate the IRA is not subject to an early withdrawal penalty. 

You are correct, the Secure Act First Time Parent Early Retirement Withdrawal Penalty Exemption pre-dated the CARES and coronavirus pandemic.  

[browncp88]

Appreciate the help, but I do not see that screen: below is the one I get...am I looking in the wrong place?

[dmertz · Accepted solution]

The exception for a qualified birth or adoption distribution is reported on Form 5329 line 2 with code 12 Other reason and attaching a statement that provides the name, age, and TIN of the child or eligible adoptee.  On the page where TurboTax asks if any of these exceptions apply, enter the amount, not to exceed $5,000, in the Other reason box.  Attaching the explanation will likely require that you paper-file your tax return.

[browncp88]

Shame I have to file a paper return, but thanks a lot for the help, appreciate the detailed answer!

[macuser_22]

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@browncp88 wrote:

Shame I have to file a paper return, but thanks a lot for the help, appreciate the detailed answer!

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Unfortunately, statements that the IRS does not have a specific form to enter the explanation on can only be hand written and attached to the mailed return.  (There are some explanations that the IRS does provide for that can be e-filed, but this is not one of them).