Final CARES Act repayment doesn't seem to affect my refund

[sgrenald]

I took $30k in a CARES act distribution in December of 2020. I paid back $10k before filing in 2021 and another $10k before filing last year. I paid the final 1/3 in December. When I entered it into the 8915 section in TurboTax, it didn't change my refund amount at all (actually, I owe this year, but it's still the same concept, right?). Just to "play" with it a little, I changed the value to a buck, and to $100k, but my "refund" didn't budge a penny. I assume either there's something obvious that I'm missing, or the whole deduction was captured in my 2020 return? Or something else/

[DanaB27]

Please be aware, the maximum repayment that can be allocated to the 2022 tax return will be 1/3 of the distribution ($10K). If you paid back more this would have to be carried back to 2020 and 2021. Therefore, if you enter a bigger repayment amount it will not affect your refund.

Please check Form 1040 line 4b (if it was from an IRA) or 5b (if it was a non-IRA), the $10k (1/3 of the distribution) should not be included since you paid it back.

To preview Form 1040:

1. Click on "Tax Tools" in the left menu
2. Click "Tools"
3. Click "View Tax Summary" in the Tool Center window
4. Click on "Preview my 1040" on the left

Please follow these steps to report the 3rd portion of the COVID distribution or any repayment:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top and type “1099-R”  
3. Click on “Jump to 1099-R” 
4. If you do not have any 2022 1099-R answer "No" to "Did you get a 1099-R in 2022?" (If you have any other 1099-R then enter all 1099-R and after entering your last 1099-R click "Continue" on the “Review your 1099-R info​​​​​​​” screen)
5. Answer "Yes" to the "Have you ever taken a disaster distribution before 2022?" screen
6. Answer "Yes" to "Did you take a 2020 Qualified Disaster Distribution?"
7. Check the box next to "If this was a Coronavirus-related distribution reported in 2020 check here", enter your information from your 2021 Form 9815-F, and then continue.
8. Enter the repayment (up the 1/3 of the distribution, any excess repayment will have to be carried back to 2020 and 2021) on the "Did you repay any 2020 Qualified Disaster Distribution in 2022?" screen

[sgrenald]

Hi Dana! 

Thanks for the suggestion. I'm using Mac TurboTax, so some of the navigation instructions didn't apply. But I have nothing in 1040 line 4b (related to this, anyway). And I paid $10k back last year and $10k back the year before, so this is the last $10k.

Here's what I did...

1. Under Retirement Plans & Social Security, I answered "Yes" to Did you take any disaster distributions in prior years or repay any prior year disaster distribution in 2022

2. On the next screen I answered "No" to Did you take a distribution in 2021 due to a non-covid disaster

3. answered "Yes" to "Did you take a 2020 Qualified Disaster Distribution?

4. Checked the box next to "If this was a Coronavirus-related distribution reported in 2020 check here", entered $10,000 from line 25 of  my 2021 Form 9815-F.

5. On the next screen ("Did you repay any 2020 Qualified Disaster Distribution in 2022?) I entered $10,000 for Repayment made to a  traditional IRA

And that was it! Like I said, if I change the value from Step 5, to a smaller number, it doesn't change my "Tax Due" value. Any clue what I'm doing wrong? 

[DanaB27]

You should also enter $10,000 on lines 23 and 24 (1/3 of the 2020 Covid distribution from an IRA).

@sgrenald 

[sgrenald]

@DanaB27 

I just tried that, but it didn't change the Federal (or State) tax due. I pulled up a copy of my 2021 8915-F from last year, and the only line that has a value is 25 (for $10k)

[DanaB27]

To clarify, you elected to spread the 2020 Covid distribution over 3 years? If yes then you should have entries on your 2021 tax return Form 8915-F lines 23 and 24 (1/3 of the distribution). 

If you didn't elect to spread it over 3 years then you will have to report all the repayments on your 2020 tax return.

@sgrenald 

[sgrenald]

@DanaB27 

Yes, I elected to spread the payments over all three years.

[DanaB27]

If you elected to spread it over three years then you should have entries on lines 23, 24, and 25 on your 2021 Form 8915-F and 2022 Form 8915-F. But line 26 taxable amount should be $0 since you paid back 1/3 each year.

[sgrenald]

In case I haven't mentioned it previously, I've been using the desktop version of Turbotax for all of these tax returns.

Just to triple check, I went back to my 2020 8915-E form and confirmed that I elected to spread the repayment over 3 years (line 17 has a checkbox that I did not check)

On my 2021 8915-F form, Item A (Tax year for which you are filing form) has 2021 checked. Item B (Calendar year in which disaster occurred) has 2020 checked. Line 25 has $10k, while every other line has a blank or zero. I'm pretty sure that when I entered the $10k value in Turbotax last year, my refund number jumped up. Otherwise, I would have noticed it, like I did this year. Obviously, I could be mis-remembering. 

However, in my 2022 return in Turbotax, if I entered $10k on lines 23, 25 & 25, wouldn't that then apply the refund, regardless of what was on my 2021 return? Turbotax asked me to enter those values, so it apparently wasn't pulling anything from my old return (line 25 had a value in it while the others did not).

I want to thank you for your assistance with my taxes. I have a lot of experience helping people with tech stuff over the phone, and texts, etc, and you're a lot more patient than I am, when dealing with knuckleheads like myself. 😀

[fanfare]

[ removed ]

@sgrenald