TurboTax Online functionality for splitting CARES Act Early Withdrawal 1099-R over 3 Years

[indydrummer]

Can anyone tell us when the new CARES Act functionality will be available to account for the new relief rules of reporting early (COVID) withdrawals as income over a three-year period? Right now, the product simply says to return to that section later. Any idea HOW much later? Just wondering where this is on the software release map and how soon we can expect to see this before April 15th. Also, any ideas on how it will function?

[macuser_22]

Only the IRS knows and they are not saying (rumor says about Feb 18 but could be later).

A COVID-19 related distribution is reported on a new 8915-E form that is not yet available and there is no estimated release date since the form is still in the draft state at the IRS. There is no telling how long it will take the IRS to make the electronic form available.

The draft paper form 8915-E is here:

https://www.irs.gov/pub/irs-dft/f8915e--dft.pdf
https://www.irs.gov/pub/irs-dft/i8915e--dft.pdf

Also to see if you qualify for a COVID-19 related distribution see:
https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-...

[indydrummer]

Ok. Well, I guess I'll hold off on finishing my taxes for a couple of weeks and see what they come up with. I guess I could always hand enter my 1099-Rs and just put in 1/3 the amount withdrawn. But, I'd rather wait and see. I'm sure the product will handle it much more elegantly when they get the feature added. 🙂

Thanks!

[CatinaT1 · Accepted solution]

You will report this on a Form 8915-E.  The IRS has not yet finalized the Form 8915-E for retirement plan distributions under the CARES act.  So this form cannot be included in the TurboTax program.  You will not be able to proceed until the form is available.

The IRS has not communicated when the form will be finalized for inclusion on the 2020 federal tax return.

We estimate it will be sometime in February 2021 before the form is available.  You can watch this link for the form availability.  Currently, the form is not listed here since there is no estimated date.  Once there is, you will find the form listed with the date available.  

IRS forms availability table for TurboTax individual (personal) tax products

Additionally, the IRS will not start processing returns until February 12, so waiting for this form is not slowing down the processing of your return.

[indydrummer]

Yes. Roger all that, and thanks! Normally I file early because I am getting a large refund. That's not going to happen this year, so I am perfectly fine with waiting. 🙂

Thanks for the info!

[indydrummer]

Found this on the IRS website:

https://www.irs.gov/pub/irs-pdf/f8915e.pdf

https://www.irs.gov/forms-pubs/alternative-filing-method-for-e-filed-returns-that-include-form-8915-...

[macuser_22 · Accepted solution]

The TurboTax 8915-E should be available on Feb. 24 (pending IRS approval by then).

The IRS just finalized the form on Feb 11. TurboTax must now submit their 8915-E software to the IRS for testing to be sure that both TurboTax and the IRS e-file computer are compatible. That process usually takes the IRS 2-3 weeks for approval to release the new form to the public.

See below for a link to sign up for an email when the form is ready.

This form is necessary to report COVID related distributions from IRA's and other retirement plans to report the distribution, pay it back over 3 years or spread the tax over 3 years.

A COVID-19 related distribution is reported on a new 8915-E form.

See this TurboTax FAQ to sign up for an e-mail when the form is ready.
https://ttlc.intuit.com/community/tax-topics/help/why-am-i-getting-getting-a-10-penalty-on-my-1099-r...