Filing 2020 taxes with 401k cares act withdrawal
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Upsmartinez1969
New Member

Filing 2020 taxes with 401k cares act withdrawal

I was wondering if some knows if I make 120k (taxed throughout the year) and take a 90k withdraw from my 401k cares act plan. Do I pay taxes on the 30k for the next 3 years only or do pay taxes on all money on top of the tax I already paid for the 120k

2 Replies
VolvoGirl
Level 15

Filing 2020 taxes with 401k cares act withdrawal

If you choose to spread it over 3 years, the income will be added to AGI in 3 equal parts on your 2020, 2021 and 2022 federal tax returns via Form 8915-E included with each of those tax returns.  So you will be adding 30,000 withdraw to each year.  Then your income will be 120k + 30k = 150k.  And I think I saw all the 401k withholding will go on the 2020 return.  

 

Another user posted....

Your only choices will be to include the entire amount on your 2020 tax return or to apply it in 3 equal parts on your 2020, 2021 and 2022 tax returns via Form 8915-E.  This is dictated by section 2202(a)(5) of the CARES Act. 

fanfare
Level 15

Filing 2020 taxes with 401k cares act withdrawal

A 401k distribution is independent of and in addition to your wages that will show on Form 1040 Line 1.

 

In normal times there is a big penalty for invading your 401k early.

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