Qualified Disaster Distribution

[jsanche48]

I am doing my 2019 taxes using Turbo Tax as i did in 2018.  after entering all my income verification and pressing continuation button it takes me to a 2016 Qualifies Disaster Distribution page.  I press NO and then it takes to a page asking me if i repaid any of the 2016 Hurricane Distribution in 2019.  i cannot get pass this page!  What is wrong?

[MarilynG1]

You should be able to get past the 'Disaster Questions' by choosing NO and Continue.

Try closing TurboTax, re-opening it and going to the next section you want to work on.

[jirbarnes]

OK, but how do I opt for the disaster consideration  for 2016 and 2017?  Since I was already past 59 1/2, early withdrawal penalty was not an issue, but I was flooded in 2016 and took a distribution to replace my brand new vehicle that flooded & was considered a total loss, & I'm driving an older clunker, now. The next year, I had to take more money to do foundation repair on my house, problems likely caused by the flooding, and the foundation repair cause huge plumbing breaks, so then I had to replumb the house ... All in all, my house became a disaster area, even before the President declared it. Is there any advantage to be gained in filing these 1099-Rs as disaster relief distributions?

[DMarkM1]

There is nothing to do on your 2019 return unless in 2018 or earlier you designated the distributions as Qualified Disaster Distributions.  Besides eliminating the early withdrawal penalty the distribution would be taxed over 3 years vice the only the year of distribution. If you qualify (see extracts below) then you could go back to the year of distribution and amend to claim the Qualified Disaster status and then each year after include the 1/3 income through the TurboTax interviews.      

Here is a link with discussion.  Also here are a couple of applicable extracts.

A qualified 2016 disaster distribution is any distribution you received from an eligible retirement plan made on or after January 1, 2016, and before January 1, 2018, if at any time during the calendar year 2016 your main home was located in a major disaster area declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act and you sustained an economic loss by reason of the events giving rise to such Presidential declaration.

Qualified 2016 disaster distributions and qualified 2017 disaster distributions are included in income in equal amounts over three years. However, if you elect, you can include the entire qualified 2016 disaster distribution or the entire qualified 2017 disaster distribution in your income in the year it was received.