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COVID 19 Withdrawl from 401k, split it into 3 years as allowed, paid taxes for 2 years, repaid the portion in year 3, How do I get credit for repaying?

Forum|Forum|3 years ago
March 24, 2023
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I paid the first two years of taxes. Rather than paying the 3 year of taxes on my 2020 Covid withdrawal, I deposited that amount into a rollover traditional IRA (the 401k would not allow repayment). In Turbo tax, I've followed the prompts in the 1099-R about the Covid 19 - 2020 withdrawal, it asks if I've repaid any 2021 withdrawals but it never asks about 2020 Covid repayments. If I put my information into the 2021 section - Turbo Tax does not reduce the amount I owe in taxes, because I didn't take any 2021 withdrawals. How do I fix this?

Best answer by DanaB27

Yes, you will enter the repayment on the "Did XXX repay any 2021 Qualified Disaster Distribution in 2022?" screen. You will have to enter your repayment under "Repayment made to any other type of retirement plan".

If you paid back more than the 3rd portion of your 2020 Covid distribution then you will have to carry back the excess and apply the repayment to the 2021 (and 2020 return if applicable). Please see How do I amend my federal tax return for a prior year?

@kelver698

E

ErnieS0

The questions about 2020 come after the questions about 2021.

You should see:

"Have you ever taken a disaster distribution before 2022?" say YES
"Did You take a distribution in 2021 due to a non-covid disaster?" say NO
"Did You take a 2020 Qualified Disaster Distribution?"
Fill in the info from your 2021 Form 8915

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K

kelver698Author

After I enter my information from my 2021 Form 8915-F, it prompts me with did I repay any 2021 Qualified Disaster Distribution in 2022?

I took a 2020 qualified disaster distribution not 2021...

First option is: Repayment made to a traditional IRA, Roth IRA, SEP, or Simple plan.

If I put my amount repaid in this box, it does not decrease my amount that I owe by a single dollar.

The other option is: Repayment made to any other type of retirement plan.

If I put my amount repaid in this box, it does decrease my amount that I owe by the correct amount, the issue is I put the money into a traditional IRA...

It never asks if I repaid a 2020 qualified disaster distribution.

Any further help?

D

DanaB27Answer

Yes, you will enter the repayment on the "Did XXX repay any 2021 Qualified Disaster Distribution in 2022?" screen. You will have to enter your repayment under "Repayment made to any other type of retirement plan".

If you paid back more than the 3rd portion of your 2020 Covid distribution then you will have to carry back the excess and apply the repayment to the 2021 (and 2020 return if applicable). Please see How do I amend my federal tax return for a prior year?

@kelver698

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"