1099R Covid distribution payback

[dschelhaas]

in 2020 we took a covid distribution from the IRA reported on 1099R.  When I input to TT, it asks if any was paid back.  on 8915E, it sounds like you can pay back some of the amount as long as you do before you file the taxes which would be paying now in 2021.  TT then reduces your tax amount owed.  Is this the way the law states that it can be done? i would then get a 5498 showing the amount paid pack.

[MinhT1]

Yes, you can repay the COVID distribution up to three years after the distribution and the amount repaid will not be taxed.

Please read this IRS document for more information.

The amounts that you repaid are considered as rollovers to the same account and are not taxed.

Enter your form 1099-R normally. After entering your form 1099-R, click Continue until you reach the screen Tell us if you moved the money through a rollover or conversion. Check the radio button which corresponds to your situation then click Continue and follow the interview. Enter the amount repaid as a rollover and it will be excluded from taxation. You will still have the credit for taxes withheld.

[dschelhaas]

MinhT1

for clarification, i can pay back some of the distribution in March of this year and still claim that payback when i file my taxes in April of this year?  

Then i would receive a 5498 from Fidelity for 2021 tax year, probably in early 2022?

If i pay back the whole amount by the 3 year period then, i would need to file adjusted return for 2020 and 2021 to recover tax paid?  

thanks, Doug

[SamS1]

Yes.  You can included any repayments for 2020 made prior to filing your 2020 tax return, include those made in 2021.  Yes. You need to file amended tax returns to recover 2020 and 2021 tax paid on distribution amounts that were repaid.  The repayments are treated as trustee to trustee transfers, which are reported on the form 5498.  Normally, the form 5498 is not issue until after 4/15 as taxpayers have until 4/15 to make IRA contributions for the previous tax year.  These are reported on the form 5498.