I am completing form 8915-E yet it still says I have to be taxed. I have 3 years to repay my loan so why am I being taxed? My 1099 R show the distribution and 8915-E wants me to be taxed on 1/3 of the amount. I am not to be taxed on any of it. Zero tax.
complying with the plan's requirements regarding a loan would make it non-taxable. as a matter of fact, you should only receive a 1099-R for a 401(k) loan if you violate the plan's or tax code provisions such as borrowing too much or failure to timely repay the loan. if you quit employment it is a deemed distribution and it becomes taxable at your termination. contact the administrator to get this straightened out.
Hi Mike, thank you, but my situation is different. The situation is regarding a 401K loan from a former employer-plan. The employer-plan has allowed for former employees to take COVID loans out during 2020 on a 3-year repayment schedule. No taxes and full repayment allowed. I did get a 1099-R and instructions to complete form 8915-E to avoid taxes, but I don't know how to fill out the form to prevent taxation via TurboTax.