Tax Year 2021:
Any distributions you took within the 2021 tax year will be taxable on your federal return. This will also include any Coronavirus Relate
d Distributions as taxable income.
For Tax Year 2020:
Distributions taken in 2020 are taxable (some exceptions apply)- including Coronavirus related distributions. However, the IRS has released guidelines for tax-deferral treatment for this type of distribution.
How do I waive the 10% penalty and spread my distribution over three years?
To take your distribution in three equal amounts over three years and waive the 10% penalty for the early distribution, take this pathway
- Federal Section
- 1099-R, RRB-1099, RRB-1099-R, SSA-1099
- Add or Edit a 1099-R
- Enter your 1099-R information as it appears on your 1099-R
Select continue after making your entry, and choose Retirement Plan. When your entry contains a qualifying code in Box 7, you will be prompted to indicate if the distribution was due to a qualified disaster.
Choose your type of plan and enter the distribution amount you received (limited to $100,000). This is also where you would enter any repayment you made on the distribution. The program will carry your information to the 8915-E automatically.
*If do not want to spread the distribution over a 3 year period, you will need to check the box next to "Elect NOT to spread the taxable amount over 3 years."