Do I even need form 8915 E to complete my filing?

[AKSnobear]

If I prepaid all the tax owed when I took my Covid 401k distribution, and do not intend to repay the distribution at all, do I still need form 8915 E to complete my filing?

Other than form 8915 E holding up the show, I have been done and ready to file, for weeks.

[larrybrow]

You will need to report the distribution on your 2020 tax return, along with whatever taxes were withheld.  If you wish to take advantage of the Covid19 disaster distribution rules which allow Covid distributions to be exempt from the 10% penalty for early distribution (for those who are not yet 59 1/2 yrs old) and to spread the distribution evenly over the next 3 years, rather than reporting the entire distribution on your 2020 return, then you will need to file form 8915E to make this election.  You can also use this form to opt out of spreading the distribution out over 3 years and only exempt the 10% penalty.  If you do not report the distribution you will most likely get a letter from IRS indicating that you failed to report all of your 2020 income, along with a bill for additional taxes plus interest and penalties.

[AKSnobear]

LarryBrow - appreciate the feedback.

I am 55, have reported the distribution in the 2020 filing - have entered the 1099 R data from financial institution (code 2; early distribution, exception applies) showing prepaid tax in full.

My confusion lays in whether I need the form 8915 E or not, as I prepaid the taxes - do not intend to spread it out over 3 years - do not intend to repay any of the distribution - I do not qualify for stimulus checks.

I appears from what I can read, 8915 E will not be e-fileable form. 8915 E will not be available for another week or ?

[Irene2805]

You do not need to include Form 8915-E with your return.  However, as larrybrow mentions above, including Form 8915-E

with your return will relieve you of the additional 10% tax on early distributions, even if you don't want to spread the distribution over 3 years.  

For more information, please see this TurboTax Help article:  What is Form 8915-E Qualified 2020 Disaster Retirement Plan Distributions and Repayments?

[AKSnobear]

Thanks, Irene - so, sounding like I should just wait until the form is released - print and file a paper return this year - and forego the e-file for this year.

[AKSnobear]

FYI - form 8915 E is now available (no longer in draft) as a downloadable / fillable form, on the IRS website.

[Irene2805]

I would wait until Form 8915-E is released, but it depends on how big the 10% early withdrawal penalty is!

You could always e-file without the form and then amend your return later, but the IRS is very very very backlogged in processing non-electronic paperwork.

[macuser_22]

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@AKSnobear wrote:

FYI - form 8915 E is now available (no longer in draft) as a downloadable / fillable form, on the IRS website.

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The TurboTax 8915-E should be available on Feb. 24 (pending IRS approval by then).

The IRS just finalized the form on Feb 11. TurboTax must now submit their 8915-E software to the IRS for testing to be sure that both TurboTax and the IRS e-file computer are compatible. That process usually takes the IRS 2-3 weeks for approval to release the new form to the public.

See below for a link to sign up for an email when the form is ready.

This form is necessary to report COVID related distributions from IRA's and other retirement plans to report the distribution, pay it back over 3 years or spread the tax over 3 years.

A COVID-19 related distribution is reported on a new 8915-E form.

See this TurboTax FAQ to sign up for an e-mail when the form is ready.
https://ttlc.intuit.com/community/tax-topics/help/why-am-i-getting-getting-a-10-penalty-on-my-1099-r...

[larrybrow]

The 8915E form is available for efiling now.  I have been filing quite a few returns using this form through H&R Block systems.  The 10% penalty is assessed when you take an early distribution from a retirement account before age 59 1/2 without any applicable exceptions.  The penalty is 10% of the distribution.  Filing 8915E will enable you to avoid the penalty provided the distribution was Covid19 related.   You can, of course, file without the 8915e, but you will likely have to pay the penalty.

[LinaJ2020]

As of today, the 8915-E Form is projected to be e-fileable starting 02/24/2021.  Please click on the following link and sign up for an email notification when the form is finalized.

Form 8915-E

If you are under age 59 1/2, the distribution from the retirement plans and IRAs is considered as an early withdrawal.  Generally, you will pay both regular tax plus an additional 10% penalty of your entire distribution unless you met certain criteria.  Due to the CARES Act, if your retirement distribution is related the Covid-19, you will not be liable for this additional penalty.  You will still pay the normal taxes like your wages and income.  For more information from the IRS, click here: Covid Relief.  If your distribution is not related to the Covid, you will need to pay the penalty.