When will Form 8915-E be available? TurboTax indicates "IRS instructions related to disaster distributions weren't ready in time for this release." It's been weeks now.

[macuser_22]

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@nolanwittrock wrote:

@dmertz 

@macuser_22 

Sorry if this sounds argumentative.

I've got the Form 8606 issue figured out.  My point right now is simply that TurboTax is not including the Covid IRA distribution as part of my AGI because it is not taxable.  After making the Form 8606 line 15b correction, my 1040 Line 4a says - IRA distributions $98,008.  Line 4b - Taxable amount $0.  Line 11 AGI is $122,480. This seems correct to me. IRS guidance states that only the taxable amount of any IRA distributions are included in AGI.

However, when you get to the MAGI calculation on the IRA worksheet, TurboTax adds back in the Covid IRA distribution, making my MAGI $214,527.  

If you can point me to IRS guidance stating that a non-taxable IRA distribution needs to be added back in to calculate MAGI, then we will all be on the same page. I have found no such guidance, so I think this MAGI number is wrong, and therefore my Traditional IRA contribution should still be deductible.

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And only the taxable amount is added to the 2020  AGI.    The entire distribution is taxable but the CARES act allows the  payments to be deferred to future years.    I do not think this is addressed in any IRS publication  but probably is in revenue rulings. (Noticeably IRS notice 2005-92)

[macuser_22]

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@taxcfp wrote:

I'm using Home and Business Desktop and the 8915 is not yet available.  I've done all the available updates, but it is treating my 1099-R like a normal distribution with not option to spread over 3 years or waive the 10% penalty.

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It was available in the 2/26 desktop version update.

[dmertz]

Now I understand the issue, it's the fact that the amount on line 12 of the IRA Deduction Worksheet does not reflect the amount that is on Form 1040 line 11.  If the amount on line 12 of the IRA Deduction Worksheet reflected the amount on Form 1040 line 11, you would get a deduction for the traditional IRA contribution.

I agree, I see nothing regarding the calculation of MAGI for the purpose of a deduction for traditional IRA contribution that says to add back the taxable amount of the CRD.  However, the IRS has not yet released 2020 Pubs 590-A and 590-B, so it's possible that these will include this modification and the TurboTax developers have some advance notice of something about this.  Still, the behavior should be no different that with regard to the treatment of disaster distributions on other Forms 8915, so it seems that the treatment of a CRD on From 8915-E would be done no differently.

However, not adding the total taxable amount of the CRD to the amount on line 11 would produce a calculation loop, so maybe this is the method that is used to break that loop.  I think that macuser_22 mentioned something like this earlier.

[nolanwittrock]

@dmertz 

Yes, I agree with everything you just said.  We are on the same page now.

Hopefully TurboTax can address this issue, as I don't believe their system is currently producing an accurate return. There have to be others out there that contributed to an IRA in 2020 and also took a CRD who are running into this same issue.

[macuser_22]

@dmertz @nolanwittrock 

I am starting to change my opinion on this.    I just tried the same situation  for a 2019 disaster with the 8915-D form (that is almost identical to the 8915-E) and the 8606 is used the same way.    

Now I am not sure that the 2019 was correct either because the  MAGI IRA deduction worksheet is the same as the taxable income, not the 2019 AGI that includes 1/3 of the 2019 distribution.

i.e. the line 1 income = 100000

line 4b  = 39000 (1/3 of the distribution)

line 8b =  153154 (AGI)

But the ira deduction worksheet shows the MAGI = 100000

That seems wrong also.

Because the MAGI without 1/3 of the distribution is below the threshold, the IRA deductions was allowed, but if the actual AGI was used, as I believe it should be, it would be denied.

[enve123]

Still having this issue as of 28-Feb...... cant eFile anything until this goes away....

[Anonymous]

Still cannot file state taxes as of 7am this morning.... due to:

"Pension/Annuities/IRA Worksheet: Txble Pens/IRA(Reg Dist) We're still working on updates related to Retirement Distributions that qualify for disaster or covid relief. You can keep working on your return and we'll remove this message when it's ready.

This is so incredibly annoying and not one single person from TT has commented on this issue!!! 

[ajd878787]

Same here, cannot submit due to state worksheet error. TurboTax totally silent but still managing to bump up their prices on Feb 28th - riddle me that.

[Nyc girl]

It’s really annoying!

they answered me on Twitter saying I can file federal without state but I never did that before 

[ajd878787]

Yes, I’ve also been advised to clear my cache, reach out to the « phone people », or pay for more advice. 

The whole thing is absurd for a mature company. Filing in two pieces solves nothing and creates more work. Make sure they don’t charge you the higher fee post Feb 28. 

[capjohna]

I just updated, completed and filed my federal taxes.  The form is live.  I had to go through the entry of the 1099-R again, and answer covid questions.  That prompted and completed the 8915-E.  I hope this information helps you.

[enve123]

But not state because the state is STILL broken right? At least it is for me as of 12:08PM on 28-FEB-2021

[Nyc girl]

NY state is still giving me an issue

i am wondering if any other program has this solved because at this point I would rather just enter all the info again if I am able to file federal and NY state with NO issues elsewhere 

[ajd878787]

TaxAct and TaxSlayer game me almost identical returns but the only nuance is if you elect the COVID distribution élection option it will remove the 10% fee AND spread into 3 years. You cannot take off the 10% fee AND pay all the taxes in year one for whatever reason. 

[Nyc girl]

Taxslayer gave me the same amount as well but when I went to file, it told me I needed to wait because of the 401k and the form has not been updated.  Said they will email when fixed :(