Hello,
I took a Covid-19 distribution from my IRA back in 2020 and elected to repay increments of 1/3 of the distribution starting on 2020. I paid 2020 and 2022 but missed the payment in the 2021 return. Can I amend my 2021 return to include the payment? If yes, will I be charged 10% penalty for that year?
Did you pay it back in 2021? If not, then no, you cannot include it as repaid that year. There is not a 10% penalty for distributions made under the covid 19 act. You would only be liable for regular income tax on the distribution.
If you did actually make the payment in 2021, simply did not include the repayment on your return, then yes, you can amend your 2021 return to include the repayment instead of the distribution.
"A7. In general, yes, you may repay all or part of the amount of a coronavirus-related distribution to an eligible retirement plan, provided that you complete the repayment within three years after the date that the distribution was received. If you repay a coronavirus-related distribution, the distribution will be treated as though it were repaid in a direct trustee-to-trustee transfer so that you do not owe federal income tax on the distribution. May I repay a coronavirus-related distribution?