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How does filing Form 8915-Disaster Distributions impact my state taxes?

SOLVEDby TurboTax1704Updated 2 weeks ago

IRS Form 8915 reports distributions from retirement plans due to qualified disasters and repayments. It lets you spread the taxable portion of the distribution over three years and waives the early withdrawal penalty in the year of the disaster. For 2020 (including Covid-related) distributions, 2022 is the third and final year that a part of that original 2020 distribution is taxable on your federal return.

It’s also used to report the deferred taxable amount of qualified 8915-disaster distributions from previous years. The Secure Act 2.0 gives taxpayers affected by any FEMA-declared disaster up to $22,000 of relief (per taxpayer), starting in 2021.

Many states tax disaster distributions similar to the IRS. States may also have deductions from income for certain types of distributions, such as railroad retirement or other government pensions. For amounts taxable in 2022, TurboTax may ask you whether the deferred amount is one of these deductible distribution types. 

For more info on how to calculate the taxable amount of your retirement distribution, see the IRS.

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