help!! filling out form 8915-F

[joeldiaz24]

I took an early distribution from my 401K due to COVID-19 on October 2020, total was $25,500. I chose to spread the distribution over 3 years. $8,500 per year. This is the last year and when i put the last 8,500 and choosing the corona virus check box, my federal return amount drops more than $2,200. It seems that the software is applying the 10% early penalty plus the 10% federal tax rate. I’ve tried deleting it and re-doing it over again, still no joy. :(. Last year i had no issues at all. I tried to contact turbo tax customer service support but no help. Anybody is having the same issue?

[BrittanyS]

Here are the steps to enter your distributions to have them distributed over the 3 years:

1. Open or continue your return in TurboTax.
2. In the left menu, select "Tax Tools"
3. Click "Tools".
4. In the pop-up window Tool Center, select "Delete a form".
5. Select "Delete" next to "Form 8915-F" and "Qualified 2020 Disaster Retirement Distr" and follow the instructions.
6. Click on the "Search" on the top and type “1099-R”  
7. Click on “Jump to 1099-R” 
8. If you do not have any 2022 1099-R answer "No" to "Did you get a 1099-R in 2022?" (If you have any other 1099-R then enter all 1099-R and after entering your last 1099-R click "Continue" on the “Review your 1099-R info​​​​​​​” screen)
9. Answer "Yes" to the "Have you ever taken a disaster distribution before 2022?" screen
10. Answer "Yes" to "Did you take a 2020 Qualified Disaster Distribution?"
11. Check the box next to "If this was a Coronavirus-related distribution reported in 2020 check here" and enter your information.

@joeldiaz24 

[joeldiaz24]

Thanks for your reply. I tried it step by step and it keeps doing the same thing, it’s taking 20% out of my refund instead of 10%. Is there anything else i could do? I’ve talked to multiple tax experts and they can’t figure it out. :(. 

[DanaB27]

Please be aware, that the 3rd portion is taxed according to your tax bracket and not just 10%. 

Did you receive a retirement distribution in 2022 and have any 2022 Form 1099-R entered? Did you get a warning about the 10% penalty during the interview?

@joeldiaz24 

[joeldiaz24]

Oh really? I had no idea that the 3rd portion was gonna be taxed at a different tax rate. If that’s the case then it makes sense why the 3rd portion is being taxed about 22%. I noticed on the tax summary that no penalty is showing under my 1040; Im just being taxed about 22% on the 3rd portion.

I didn’t receive any 1099-R for 2022 or 2021 Tax years so nothing has been entered on that section. I didn’t receive any warning related to the penalty or anything related to that. Thanks for your response.