Tax Year Prior to 2020: Early savings withdrawal penalty

[CL1985]

In 2018, I had an early savings withdrawal penalty.  In 2019, the bank repaid the penalty.  How do I report this?

[VictorW9]

Here's a TurboTax resource for you to consult:

Solved: I had a penalty on early withdrawal of savings of ...

[CL1985]

The reply given does not answer my question.  The question was "I reported the penalty in one year and the following year, the bank said the penalty was in error.  So, they refunded my penalty paid. How do I report this income that was expensed in a previous year?"

[Opus 17]

You have what is called a "taxable recovery," or the reimbursement of a previous deduction.  This is taxable income in the year of the repayment to you.  Report it on the income page.  I believe taxable recoveries are included in the very bottom topic, "other uncommon income."

[BillM223]

Since you did not deduct the penalty in the previous year (you didn't, did you?), then you don't report the refund of the penalty as income in the subsequent year.

[boydboyd01]

In 2018, I had an early savings withdrawal penalty.  How and where in TurboTax do I report this?

[VictoriaD75]

Is the penalty reported in box 2 of a 1099-INT? Follow these steps:

• From the Federal menu, click on Wages & Income
• Expand the menu for Interest and Dividends
• Click Start/Revisit next to Interest on 1099-INT
• Either Add another 1099-INT or click Review next to one already reported on your return
• If starting from scratch, you may either import the 1099-INT or choose I'll type it in myself
• Check the box My form has info in other boxes (this is uncommon).
• Enter the Early withdrawal penalty in Box 2

[Opus 17]

Remember the penalty must be deducted on your 2018 return, not your 2019 return.  A 2018 return can't be prepared using Turbotax online, which only prepares the current tax season.  You will need to be using Turbotax installed on your own Mac or PC.   If you already filed a 2018 return, you can report the penalty by filing an Amended 2018 return.