Spreading a cares act withdrawal over 3 years-year 2 question

Forum|Forum|4 years ago
January 21, 2022
4 replies
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Okay, this is likely a really a dumb question but currently I am confused. I took a cares act withdrawal from my 401k in December 2020. When I filed my taxes last January I elected to spread it out over 3 years. Once TurboTax got everything loaded into the software, I had no problems getting everything done. Now my question is this. In year 2 how do you handle the second of the three withdrawal reportings? Do we get another 1099-r from the financial institution (Fidelity), do you just automatically use the same amount as you did the first year? I have taken a look at filing my taxes. Once I get to the screen of adding the withdrawal amount or a 1099-r, it just gives that message that they are waiting for guidance from the IRS and I will need to revisit this later. so, is it safe to assume they are just waiting for the IRS to release some mew 8915 form or instruction?

Best answer by MAK70

A very good question, actually. Yes, the IRS needs to finalize Form 8915-F then allow time for the programmers to implement before the section will work. You will not receive another 1099-R and TurboTax will transfer the information from 2020.

If you took a Coronavirus-related disaster payment in 2020, you have the option of spreading the income over three years to spread the tax due. There is no additional penalty for early withdrawal and you do have the option to repay some or all of it within the three years.

MAK70Answer

AlanP64Author

Thank you very much!

mmizzack

100% agree! If it's not updated and implemented into TurboTax soon, I will go elsewhere. Can anyone from TurboTax comment on this time frame?

Michael

Deast

I received a max CARES ACT Covid distribution in December 2020 (tax year 2020) and have paid taxes on 1/3rd each year from 2020, 2021, 2022. Now I am doing my 2023 taxes, and Turbo tax is carrying over another 33,333 as taxable in 2023. Why is this the case? Does it not realize I already paid all three 1/3rd's?

DoninGA

Employee

@Deast wrote:

I received a max CARES ACT Covid distribution in December 2020 (tax year 2020) and have paid taxes on 1/3rd each year from 2020, 2021, 2022. Now I am doing my 2023 taxes, and Turbo tax is carrying over another 33,333 as taxable in 2023. Why is this the case? Does it not realize I already paid all three 1/3rd's?

The Form 8915-F Worksheet and the Form 8915-F along with the Form 1099-R were transferred from the 2022 tax return and need to be deleted.

If you are using the TurboTax desktop CD/Download editions installed on your personal computer, click on Forms.

When in Forms mode locate these forms on the left side of the screen. Click on the form to open each one and at the bottom of the screen click on Delete Form

Or if you are using the TurboTax online editions -

Click on Tax Tools on the left side of the online program screen

Click on Tools

Click on Delete a form

Deast

That solved the problem. Thank you!

Sahayre

I am having the same issue.

MonikaK1

If you are having the same issue as the previous poster - that TurboTax has created another Form 8915-F and related worksheet and Form 1099-R from 2020 when the tax has already been paid over the previous three years - then the steps provided by @DoninGA above should resolve the problem.

Here's the procedure for deleting unwanted forms, schedules, and worksheets in TurboTax Online:

Open or continue your return in TurboTax.
In the left menu, select "Tax Tools" and then "Tools".
In the pop-up window Tool Center, select "Delete a form".
Select "Delete" next to the form you wish to delete. In this case, look for Form 8915-F, Form 8915-f Worksheet, and Form 1099-R for the 2020 income that was already taxed, and follow the instructions.