CARES Act retirement distribution in turbotax software - penalty-free and paying 1/3rd

[Thaddeus]

I had Covid in 2020 and withdrew money from my 401k under the Cares Act. I had 10% Federal and 10% State taxes taken out from my withdrawals. I know there was no 10% penalty fee because of the Cares Act. When I filed last year I chose to claim that money over three years. 1/3 of my withdrawal was claimed as taxable income. I now have to claim the other 2/3 this year and next year. I have no idea how or where to enter this information and I'm not sure how to enter the 10% taxes I already had taken out in the form. Can anyone help me figure this out? Thank you.

[FangxiaL]

Here is how to report it once the form is e-file ready:

To report the 2021 CARES Act retirement plan distribution for 2020 that gave you 3 years to repay it back, follow these steps:

With your federal return open:

1. In the search box, type 1099-r, then Jump to 1099-r
2. On the next screen, select No if you did not receive a 1099-R in 2021
3. On the next screen, select Yes to Have you ever taken a disaster distribution before 2021?
4. Select Yes, I took a disaster distribution between 2017 and 2020 on the next screen
5. The message below is what you will see because the form is not ready as of today. The new form is expected sometime in March.

You'll need to revisit this area

Unfortunately, IRS instructions related to repayments of disaster distributions weren't ready in time for us to include them in this release. Please revisit this area later.

@Thaddeus

[C-B-B]

How can we be notified when this form is ready within TurboTax?  

[TiffanyL]

There isn't a way to sign up for notifications but you can check the FAQ link provided below for form availability dates:

IRS forms availability table for TurboTax individual (personal) tax products

@C-B-B

[mditty4193]

following

[sarber]

Can you please provide an estimate of when the form will be ready?  IRS says it is available and can be used for efile now.

[MarilynG1]

The scheduled availability for Form 8915-F for reporting CARES Act retirement distributions is 03/31/2022.

Click this link for Federal Tax Form Availability.

[d0nalba1n]

What if we took out money in 2021 and not in 2020.  I was diagnosed in December and took a distribution in 2021.  I did NOT file an 8945-E in 2020.  The 1099-R for 2021 is showing a 1 in the box. When I called Fidelity they said they aren't allowed to ask health information and would not change it to a 2.  It is hitting me with the entire amount due in one year.  I have no problem paying for it but I need it rated over three years.  I saw where TurboTax said 8945-F is coming out.  I did the paper form from the IRS and it said I couldn't use it based on the worksheets.  HELLLLPPPP!  I don't want to do an installment program I just want to rate it over three years and pay it in 1/3 payments.

[macuser_22]

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@d0nalba1n wrote:

What if we took out money in 2021 and not in 2020.  I was diagnosed in December and took a distribution in 2021.  I did NOT file an 8945-E in 2020.  The 1099-R for 2021 is showing a 1 in the box. When I called Fidelity they said they aren't allowed to ask health information and would not change it to a 2.  It is hitting me with the entire amount due in one year.  I have no problem paying for it but I need it rated over three years.  I saw where TurboTax said 8945-F is coming out.  I did the paper form from the IRS and it said I couldn't use it based on the worksheets.  HELLLLPPPP!  I don't want to do an installment program I just want to rate it over three years and pay it in 1/3 payments.

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The 8915-F is for disaster related distributions in 2020 or earlier and does not apply to any 2021 distribution regardless of the reason.

[wilder7273]

Following this post to keep updated this form getting published with Turbo Tax.

[row06]

Form is now available in TT

[sillyleo8]

Sigh. It asked me the question about "Did either of you" but then it doesn't take me through guided steps. Are we sure it's fully loaded? I really don't have any idea how to handle this for the 2nd year since we didn't get a NEW 1099-R. 

[mditty4193]

Question for Turbo Tax.......
While I WAS able to enter the information into the form, indicating how much of the amount taken from 401k in 2020 was claimed in 2020, my tax numbers (refund from Fed & state) did not change after entering that information.  I had my taxes completed, other than claiming the 1/3 of the distribution from 2020, and after adding that to the form, my refund numbers did not change.  I would have expected Turbo Tax to add this 1/3 of the amount to my income, and assessed the amount of the tax owed on that portion.

[DoninGA]

@mditty4193 Look at your federal tax return Form 1040 on Lines 4b or 5b.  Is 1/3 of the 2020 distribution entered on either of those lines?

[mditty4193]

No......although I would have expected it to hit there after completing the form.