Question

I have an inquiry concerning a question asked about distributions within the Turbo Tax Software. I want to know if it includes sponsored retirement accounts.

Forum|Forum|4 years ago
May 28, 2022
1 reply
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Did I receive any distributions from a retirement account after 2018? We are only talking about distributions that occurred before the due date (including extensions) of your 2021 return. Does this include employer sponsored retirement accounts such as 401ks?

TurboTax Free Edition Online

O

Opus 17

Employee

Is that in the state section or federal? I can't think of any reason the federal return would want to know that. Maybe it's a state issue? Which state?

S

SweetieJean

Employee

It's asked for the (Federal) Retirement Savings Credit:

2021 Form 8880 (irs.gov) at line 4.

O

Opus 17

Employee

@SweetieJean wrote:

It's asked for the (Federal) Retirement Savings Credit:

2021 Form 8880 (irs.gov) at line 4.

In that case, yes it includes employer plans.

The retirement savers credit will give low income taxpayers a credit if they invest for retirement, such as in an employer plan or an IRA. But since the credit is an incentive to invest, you don't get the credit if you take the money back out.

Here is the instructions:

Enter the total amount of distributions you, and your spouse if filing jointly, received after 2018 and before the due date of your 2021 return (including extensions) from any of the following types of plans.

• Traditional or Roth IRAs, or ABLE accounts.

• 401(k), 403(b), governmental 457(b), 501(c)(18)(D), SEP, SIMPLE, or to the federal TSP.

• Qualified retirement plans, as defined in section 4974(c).

Don’t include any of the following.

• Distributions not taxable as the result of a rollover or a trustee-to- trustee transfer.

• Distributions that are taxable as the result of an in-plan rollover to your designated Roth account.

• Distributions from your eligible retirement plan (other than a Roth IRA) rolled over or converted to your Roth IRA.

• Loans from a qualified employer plan treated as a distribution.

• Distributions of excess contributions or deferrals (and income allocable to such contributions or deferrals).

• Distributions of contributions made to an IRA during a tax year and returned (with any income allocable to such contributions) on or before the due date (including extensions) for that tax year.

• Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k).

• Distributions from a military retirement plan (other than the federal TSP).

• Distributions from an inherited IRA by a nonspousal beneficiary.