2020 IRA instructions for disaster distributions related to Covid

[mhuff999]

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!

[macuser_22]

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@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!

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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.

[mhuff999]

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

[jdhavens]

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.

[philipwl]

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??

[macuser_22]

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@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??

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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? 

[philipwl]

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?

[macuser_22]

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@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?

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Do you have more then 1 1099-R?    Delete that 1099-R and make sure that 1040 line 4 is empty.

[philipwl]

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?

[philipwl]

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!

[macuser_22]

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@philipwl wrote:

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!

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What is different on the 2nd 1099-R?  What is the code in box 7?   Is it for the same spouse?

[macuser_22]

I just tried it with two 1099-R's for $30,000 each, Traditional IRA , COVID related, none paid back with the tax paid over 3 years and the resulting 1040 shows $60,000 on 4a (the total of both) and $20,000 on 4b (1/3 of the tax - $10,000 for each).

[fanfare]

so far I've tried three different tax software providers, including TurboTax Online, and each gives widely different results for a COVID distribution with an amount paid back.

Still waiting for at least two of the three to converge.

[trent5]

Does anyone know if this update has taken effect yet? I am still receiving the error message in TurboTax?

[trent5]

Does anyone know if the IRS/turbotax have resolved the Form 8915 issue? I am still receiving an error message stating that I need to revisit this later because the disaster distributions area was not ready in time for them to include it in this distribution.