Note: The 2018 Tax Cuts and Jobs Act has suspended the itemized deduction for personal casualties and theft losses for tax years 2018 through 2025.
If you are received a distribution from your IRA due to being a victim of a natural disaster in 2018, you can report either:
- The whole distribution amount in the year it was received or
- in equal installments over 3 years
To report the income on your return, go to the
- Federal Section
- IRA/Pension Distributions
- Add or Edit a 1099-R
- Enter the amount (either whole or 1/3 of the distribution) into box 1 and box 2a.
If you received more than one distribution for the tax year, all distributions must be treated the same way.
The distribution amount is limited to $100,000 for hurricane disasters and $100,000 for wildfire disasters.
Complete the following forms to report the distribution:
- Form 8606 to report the distribution from a traditional IRA and keep track of your basis (if basis is more than $0)
- Form 1099-R to report the taxable income on your return
- Form 8915B to report the distribution will be spread out over 3 years (not supported)
- May need to complete Form 5329 depending on distribution code to prevent the additional 10% penalty for early withdrawal
You must also designate on your return that you were affected by a natural disaster. Please report:
- Basic Information
- Personal Information
- Additional Personal Information
- Check the last box under Taxpayer's Information and another box will appear
- Select the natural disaster, from the drop-down menu that affected you
- Select Enter Disaster Designation, if the natural disaster you need is not listed. Select this designation and another box will appear for you to type a description