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If I repay the withdrawals for a coronavirus distribution to my Roth IRA, will my 2023 AGI be reduced by the amount I pay back, since it was included in my 2020 AGI?

Forum|Forum|3 years ago
March 21, 2023
2 replies
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I filed my 2020 taxes using Turbotax and on those taxes I paid for the full amount of my Roth IRA withdrawals that year because I was under 59.5 years old. The Roth was/is an active IRA account and was /is much older than 5 years. I avoided the 10% early withdrawal penalty because the withdrawals fell under the exception for Coronavirus emergency-related withdrawals. I could have spread the income across 3 years but opted to have the withdrawals all included in my 2020 AGI. I have the option to pay back the withdrawals into my Roth IRA within 3 years, and it will be processed as some kind of rollover, I think, if I do that. My question is: if I repay the withdrawals in 2023, will my 2023 AGI be reduced by the amount I pay back, given that the withdrawals were all part of my 2020 AGI?

TurboTax Online

Best answer by dmertz

If you repay the distribution, because you included the entire amount in income on your 2020 tax return you'll need to amend your 2020 tax to obtain a refund of the taxes paid. Nothing of this would go on your 2023 tax return.

M

MAK70

If it was a Roth IRA, your contributions were not included in your AGI. If you make a repayment, it will be treated as a rollover- look for the screen below in the retirement section.

fanfare

Employee

For 2020, did you complete Form 8606 Part III prior to making entries on Form 8915-E, as required by the Instructions?

If not you should amend your 2020 tax return.

@yejtax

D

dmertzAnswer

Employee

If you repay the distribution, because you included the entire amount in income on your 2020 tax return you'll need to amend your 2020 tax to obtain a refund of the taxes paid. Nothing of this would go on your 2023 tax return.