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Does the Cares Act early withdrawal exemption apply to distributions from 401(k) when 1099-R Box 7 has codes 1B? Is this a not a qualified plan? Works if the code is 1

Forum|Forum|5 years ago
February 26, 2021
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I withdrew less than the $100,000 from my 401(k) account and was issued two 1099-R in different amounts that equal the amount I withdrew. One 1099-R has Box 7 with the code 1 and the other has the code 1B. TurboTax processed the code 1 as expected but claims I owe the early withdrawal penalty for the Code 1B.

TurboTax Deluxe Online

Best answer by DaveF1006

Yes, you should get questions regarding COVID regarding the first 1099-R if you entered Code 1 in Box 7 and then Code B in the second row in Box 7.

After entering the 1099R, make sure when you reach the screen that says Do any of these situations apply to you, select I took out this money because of a qualified disaster (includes COVID-19) As you continue through the remainder of the screens, there will be additional Covid -related questions asked.

I tested this and it worked in my program

ColeenD3

Code B – Designated Roth account distribution. These are both from a 401k? 401k should not have code B. Box 7 codes

No, There should be no issue with Code B. Make sure that you correctly answered all the Care questions for each 1099-R

E

ElectroplaterAuthor

Yes, they are from my 401K. My about was split between two 1099R forms. When I have two codes 'IB' for box 7, I do not get any questions about covid. When there is one code '1' it will ask me if this was due to covid.

Thanks!

DaveF1006Answer

Yes, you should get questions regarding COVID regarding the first 1099-R if you entered Code 1 in Box 7 and then Code B in the second row in Box 7.

After entering the 1099R, make sure when you reach the screen that says Do any of these situations apply to you, select I took out this money because of a qualified disaster (includes COVID-19) As you continue through the remainder of the screens, there will be additional Covid -related questions asked.

I tested this and it worked in my program

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