Question

Reporting last year of CARES Act withdrawal after moving to another state

Forum|Forum|3 years ago
March 28, 2023
1 reply
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If you move after taking a 401K CARES act withdrawal and need to report the last year of the 3 year option, which states taxes the last 1/3. The state where you currently reside or the state that you lived in when you took the withdrawal in 2020?

M

MinhT1

The CARES Act withdrawal is taxed by the state where you resided at the time of the withdrawal.

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M

mlzeiglerAuthor

I had a local accountant help me determine my estimated tax payment before the end of 2022. She told me that these types of withdrawals have an exception and are not treated like the regular income so are taxed in the state where you reside not the state where the withdrawal occurred that is why I'm double checking this.

M

MinhT1

You did receive the full amount of the distribution in the state where you resided in 2020.

The law only allows you to spread the taxation of the distribution over 2020, 2021 and 2022. So in 2022. you should pay the tax due on one-third of the distribution to the state where you resided in 2020.

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