Question

1099-R cares act 401k withdrawl

Forum|Forum|4 years ago
January 29, 2022
2 replies
0 views

In 2020 I took out appox 70K under the cares act. I elected to have 15% held back in taxes. That was approx 10k. Then elected to pay the rest of the tax bill over 3 years.

last years taxes shows me paying taxes on 1/3 of that. I know the 8915-F isn't ready. But, looking at the draft, where are they taking in consideration that I already paid 10k in taxes? I know I won't get another 1099-R. The 10k does show up in box 4 of the 1040 on last years tax form

TurboTax Basic Windows

VolvoGirl

Employee

Sorry you got the full 10,000 withholding on your 2020 return. That increased your refund (or reduced the tax due) last year. You are stuck with only adding the income now.

VolvoGirl

Employee

Just wrote a better answer for that......

The tax withheld in box 4 was only applied towards 2020. Therefore, you should have taken that into account and adjusted your withholdings in the next two years if you spread the amount over 3 years.

M

MAK70

The trustees are required to withhold a percentage at the time of distribution, for many people who chose the three year tax payments that resulted in a refund the first year since only one third was taxed. For some people, this may cause a tax due in 2021- it really depends on the overall tax liability with your other income. If there is tax due this year, you may want to consider either upping your withholding on W2s or making estimated tax payments so you are not in the same situation next year.