Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
Scooby5
Level 3

I don't see TurboTax adjusting for Covid 401(k) withdrawals

I took money out of my 401(k) in 2020, which were authorized (penalty-free) withdrawals due to Covid-19.  The law also allows for the taxes on those withdrawals to be spread out over 3 years.  However, I do not see any option anywhere in TurboTax to adjust for that situation.  Is it in there somewhere and I am missing it?

 

I am using TurboTax Home and Business 2020.

1 Best answer

Accepted Solutions
DoninGA
Level 15

I don't see TurboTax adjusting for Covid 401(k) withdrawals

The IRS has a new Form 8915-E for COVID-19 related retirement account withdrawals.  This form has not been finalized by the IRS for filing with a 2020 federal tax return.  The IRS has not announced when this form will be available.  Once available it will be included in the TurboTax software.

We estimate the form may be available sometime in February.

View solution in original post

13 Replies
DoninGA
Level 15

I don't see TurboTax adjusting for Covid 401(k) withdrawals

The IRS has a new Form 8915-E for COVID-19 related retirement account withdrawals.  This form has not been finalized by the IRS for filing with a 2020 federal tax return.  The IRS has not announced when this form will be available.  Once available it will be included in the TurboTax software.

We estimate the form may be available sometime in February.

View solution in original post

wallstreetbets
Level 1

I don't see TurboTax adjusting for Covid 401(k) withdrawals

When do we anticipate this form to be ready? I know that many people I have talked with have asked about this as they are having to delay filing of their tax return due to this form not being ready. Does Turbo Tax representation anticipate this form to  be ready by Feb. 15th? 

LinaJ2020
Expert Alumni

I don't see TurboTax adjusting for Covid 401(k) withdrawals

No, we cannot anticipate, unfortunately.  As of today, the IRS has not yet finalized the Form 8915-E for retirement plan distributions, therefore this form cannot be incorporated in the TurboTax program. At this point, the IRS has not corresponded with us when the form will be finalized and available.  To see the IRS draft form, click here: Form 8915-E

 

Another option is you can file without this form and come back later to amend.   But note that IRS will not start processing any returns until February 12, 2021.

 

Beginning with the 2019 tax year, you can e-file amended tax returns. If you used TurboTax to prepare Form 1040-X, follow the software's instructions to e-file the amendment.

 

To see how to amend your taxes, click here: 

 

Steps to amend in TurboTax

 

How to file amendment

 

@wallstreetbets

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
christinaredd32
New Member

I don't see TurboTax adjusting for Covid 401(k) withdrawals

It's now February 12th and I checked for updates to my Turbotax Deluxe software but still do not see this form available for qualified covid withdrawals for 2020 tax filing. Now that the IRS has started accepting tax returns, should we have this form available for download in our software?

DoninGA
Level 15

I don't see TurboTax adjusting for Covid 401(k) withdrawals


@christinaredd32 wrote:

It's now February 12th and I checked for updates to my Turbotax Deluxe software but still do not see this form available for qualified covid withdrawals for 2020 tax filing. Now that the IRS has started accepting tax returns, should we have this form available for download in our software?


The Form 8915-E is scheduled to be available for e-filing on 02/24/2021

MEF1680
New Member

I don't see TurboTax adjusting for Covid 401(k) withdrawals

It looks like the  IRS has finalized the 8915-E.  When do you expect to have the 2020 401k Covid withdrawal process added to the system. I would like to split my withdrawal into the three years but when I enter my return info it still does not give me that option. 

BillM223
Expert Alumni

I don't see TurboTax adjusting for Covid 401(k) withdrawals

The current estimated date for the release of the ability to e-file form 8915-E is 2/25/2021.

 

Note that this is an estimate. You can follow the progress by looking at Federal Forms Availability.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
baseball571
Level 2

I don't see TurboTax adjusting for Covid 401(k) withdrawals

Are we able to spread the 401k distribution ratably yet on turbotax? Do I just fill out the amount in box 1 to the amount I want to be taxed? How does the process work? I like turbo tax but this is starting to be a pain. Help!

DoninGA
Level 15

I don't see TurboTax adjusting for Covid 401(k) withdrawals


@baseball571 wrote:

Are we able to spread the 401k distribution ratably yet on turbotax? Do I just fill out the amount in box 1 to the amount I want to be taxed? How does the process work? I like turbo tax but this is starting to be a pain. Help!


You enter the Form 1099-R as received.  After entering the 1099-R there will be several screens asking questions about the withdrawal.  There will also be screens asking if this withdrawal was due to Covid-19.

If you do not see any screens asking about Covid-19 then delete the 1099-R and re-enter.

 

Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments is available for both the TurboTax online web-based editions and the TurboTax desktop CD/Download editions.

 

If you are using the desktop editions you have to update your software.  Click on Online.  Click on Check for Updates.

 

djgabe06
Level 1

I don't see TurboTax adjusting for Covid 401(k) withdrawals

Everything is updated to last version , still does not show up on the software.   I even deleted the withdrawal three times and re-entered all the info.  The software should automatically prompt the questions but that it's not -it should give you the tax breakdown for the next three years as an option .  Currently the only way it works if you fill out the pdf form.

DoninGA
Level 15

I don't see TurboTax adjusting for Covid 401(k) withdrawals


@djgabe06 wrote:

Everything is updated to last version , still does not show up on the software.   I even deleted the withdrawal three times and re-entered all the info.  The software should automatically prompt the questions but that it's not -it should give you the tax breakdown for the next three years as an option .  Currently the only way it works if you fill out the pdf form.


Are you using the TurboTax desktop software or the TurboTax online web-based editions?

What code is in box 7 of the Form 1099-R?  Is the IRA/SEP/SIMPLE box checked?  Is there an amount entered in box 2a of the form?  Does box 2b have any boxes checked?

djgabe06
Level 1

I don't see TurboTax adjusting for Covid 401(k) withdrawals

Box 7 =  2

IRA /SEP=  Not checked

Box 2 A has an amount

Box 2B not checked

 

 

SamS1
Expert Alumni

I don't see TurboTax adjusting for Covid 401(k) withdrawals

If you are in Desktop, go into "Forms" mode and review the 1099R.  While in your return in Desktop:

  1. In the upper right hand corner Select "Forms"
  2. Now in the left hand column of the screen, select the 1099R form you are working on
  3. Review your input then scroll down the screen to the Disaster Relief section.
  4. There you can review the Covid distribution questions and indicate amounts.
  5. To return to Step-By-Step, select in the upper right hand corner.

While in Forms Mode review the forms listing for red !.  You will need to correct these in order to efile.

 

 

The 8915-E will be used for penalty relief from early retirement plan distributions and include the option to spread the distribution income over 3 years.  This may be a good option if the distribution is pushing you into a higher marginal tax bracket.  You may end up paying less tax if you spread the distribution over the 3 years

 

 

Dynamic AdsDynamic Ads
Privacy Settings
v