I took an IRA distribution in 2020 as a result of Covid 19. When I enter my 1099-R and check that it was a result of covid disaster recovery I am told the IRS instructions for disaster distributions weren't ready for us to include in this release and to check back later. I'm using the online web version. Any idea when this will be updated?
Coronavirus-Related Distributions will be reported on the new IRS Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments (Use for Coronavirus-Related Distributions).
The IRS has not yet finalized the Form 8915-E or the Form 8915-E instructions.
There is currently no date from the IRS for when this form will be available.
Thanks for the reply. It looks like the form is still in draft status. I presume once released TurboTax will be updated to include form 8915-E once it is released?
Yes, after the IRS has finalized the form and instruction it will be incorporated into the TurboTax software. But only after the IRS approves the TurboTax form and calculations based on the IRS instructions.
Can we please be notified of the progress of this form between IRS and then the subsequent TurboTax software update. This will delay ability to prepare and file 2020 taxes.
I too can not finish my Turboxtax return because I withdrew money from my IRA thinking I can qualify for this 10% penalty reduction and spreading out the income over three years. I guess we will have to wait and file an extension if needed.
The IRS will be releasing Form 8915-E to use with the 1099-R. Here is more information:
CARES Act and 1099-R Withdrawal.
The software has not been updated yet because the form has not been finalized by the IRS. Once the software has been updated, you will be prompted through the form with instructions on how to enter the information.
The IRS has not provided a release date for the form at this time. Use this link IRS Form Availability to watch for when the 8915-E form will be available in the software once the IRS completes it.
The link provided above for IRS Form Availability didn't work for me. But here's a link to the current status of the 8915-E:
https://www.irs.gov/forms-pubs/about-form-8915-e
(see Current Revision section on that page)
As of 2/10/2021, it still says DRAFT.
At this point and time the Form 8915-E (Qualified 2020 Disaster Retirement Plan Distributions and Repayments Use for Coronavirus-Related Distributions) is not finalized. We currently do not have an estimated date when the form is ready.
Please sign-up here and we will email you once the form is live.
The pandemic has affected your taxes in many ways. Including reporting in TurboTax the amount of stimulus money you received. Click Here for more information on how the Pandemic affected your 2020 taxes.
Thank you for the email link for updates. I'm hoping this is released soon.
It will be soon. Form 8915-E: Qualified 2020 Disaster Retirement Plan Distributions and Repayments, which is used for COVID-related early distributions, will be e-fileable starting 2/24. The IRS is updating form 5329’s instructions to make it clear that COVID related exceptions cannot use 5329 and should use the new 8915-E.
The pandemic has affected your taxes in many ways. Including reporting in TurboTax the amount of stimulus money you received. Click Here for more information on how the Pandemic affected your 2020 taxes.
Free Tax USA already has form 8915-E in their product. I filed my tax return with them today.
My Home&Business TurboTax has the 8915E-T form, but it doesn't calculate line 4a or 4b correctly spreading out the distribution over 3 years. Is that to be expected?
What is incorrect? It is working fine after the last updates. Try deleting the 1099-R and re-enter.
Thanks for the fast reply! Yes have tried deleting/re-entering the 1099-Rs a couple times. I have 2 IRA withdrawls, 18,500 (7,155 RMD and 11,345 covid) and 87,033 (all covid), total of 105,533. 1040 line 4a shows 105,533, but 4b shows negative 35,740. I expected 4b to show positive 35,177. I now have a negative total income (?!). If I redo without the Covid provision, it seems ok but I pay a lot of tax of course.
Thanks for your help!
@mhuff999 wrote:
Thanks for the fast reply! Yes have tried deleting/re-entering the 1099-Rs a couple times. I have 2 IRA withdrawls, 18,500 (7,155 RMD and 11,345 covid) and 87,033 (all covid), total of 105,533. 1040 line 4a shows 105,533, but 4b shows negative 35,740. I expected 4b to show positive 35,177. I now have a negative total income (?!). If I redo without the Covid provision, it seems ok but I pay a lot of tax of course.
Thanks for your help!
If you rolled the RMD back then it is NOT a COVID related distribution, it is a simple rollover. Delete and re-enter and answer the RMD question that "none of this distribution was a RMD" or "RMD not required", then say you "moved" the money and choose that it was all rolled over (or part was - what ever the case). That will put the amount on 1040 line 4a with the word "ROLLOVER" next to it.
Thanks for the advice. If I just enter the first IRA withdrawl of 87k, it works fine. If I pay back the 2nd one, it stays fine. Thanks for the help
My Federal return spread my COVID-related IRA distribution over 3 years but my Massachusetts state return is not. The entire amount is hitting in 2020 for payment. How can I get my MA state return to recognise over 3 years as on my Federal return? Massachusetts Schedule X is showing the entire IRA withdrawal as taxable.
I am having the same problem. 1040 line 4b is miscalculating. Should be the total of Line 19 from Form 8915E-S and 8915E-T, but the amount calculated is actually more than the total IRA withdrawals! I have tried deleting the 1099-R's twice and at first that appears to be working, only to revert to the miscalculated amount. What now??
@philipwl wrote:
I am having the same problem. 1040 line 4b is miscalculating. Should be the total of Line 19 from Form 8915E-s and 8915E-T, but the amount calculated is actually more than the total IRA withdrawals. I have tried deleting the 1099-R's twice and at first that appears to be working, only to revert to the miscalculated amount. What now??
Line 4b indicates an IRA. Did you take an IRA distributing and want to spread the tax over 3 years?
Are you paying it back?
Exactly what is incorrect?
Thank you for the quick response. Yes, it is an IRA distribution, wanting to spread over 3 years. Form 8915E is calculating correctly (⅓ of total IRA distribution amount to be entered on line 4b of 1040), but Line 4b is not reflecting the ⅓ amount from Line 19 of Form 8915E. The amount on LIne 4b of 1040 is a number larger than the total IRA distributions in Line 4a. This miscalculation is on the 1040 Worksheet as well as Form 1040. Can I override the worksheet and edit the amount shown in Line 4b?
@philipwl wrote:
Thank you for the quick response. Yes, it is an IRA distribution, wanting to spread over 3 years. Form 8915E is calculating correctly (⅓ of total IRA distribution amount to be entered on line 4b of 1040), but Line 4b is not reflecting the ⅓ amount from Line 19 of Form 8915E. The amount on LIne 4b of 1040 is a number larger than the total IRA distributions in Line 4a. This miscalculation is on the 1040 Worksheet as well as Form 1040. Can I override the worksheet and edit the amount shown in Line 4b?
Do you have more then 1 1099-R? Delete that 1099-R and make sure that 1040 line 4 is empty.
Yes, we have 2 IRA distributions. If I delete the 1099-R's, the amount on Line 4 (a&b) is zero.
TROUBLESHOOT:
I deleted the 1099's again and re-entered just one of them. The result on Line 4a and b is now correct. Upon entering the second 1099-R data, the calculation on Line 4 goes haywire when I attempt to enter the Gross Distribution amount from Line 1 of the second 1099-R. This results immediately in a large "Federal Tax Due" number. When I complete the second 1099-R data, and check to spread over 3 years, the "Federal Tax Due" reduces slightly, but the Line 4b calculation is incorrect. 1040 Line 4b shows an amount larger than Line 4a. If I then delete the second 1099-R, the calculation on LIne 4b is once again correct (shows 1/3 of the amount on Line 4a).
Seems the problem stems from having more than one IRA distribution. Is there a workaround?
TurboTax does not calculate 1040 Line 4b correctly if there are two IRA COVID distributions to report. Until TurboTax creates a software fix or other workaround for this error, and to maintain an accurate "Federal Tax Due" result, a temporary bandaid is to include the second IRA distribution as "Other Common Income" in the 1099-MISC income section. Not sure how IRS will like that one if a TurboTax correction is not available before April 15!