My 401K Plan Admin states I do not have to pay tax...
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TinaW65
Returning Member

My 401K Plan Admin states I do not have to pay taxes on my distribution - COVID - but Turbo Tax is still showing I am to be taxed via form 8915-E

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.

2 Replies
Mike9241
Level 6

My 401K Plan Admin states I do not have to pay taxes on my distribution - COVID - but Turbo Tax is still showing I am to be taxed via form 8915-E

 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. 

TinaW65
Returning Member

My 401K Plan Admin states I do not have to pay taxes on my distribution - COVID - but Turbo Tax is still showing I am to be taxed via form 8915-E

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.

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