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1099 R Early Distribution

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    1099 R Early Distribution

    Client is an individual taxpayer who took out 3,000 from his IRA under the COVID 19 relief. Client received the 1099R stating that it is a taxable distribution. Client wants to pay tax but not the 10% penalty in the 1040. How do you tell the IRS that this is a COVID 19 distribution and hence not subject to the 10% penalty

    #2
    One place to report it is Form 8915-E. But I haven't checked the Form 5329 instructions to see how it interacts there.
    "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

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      #3
      Form 5329 exceptions?

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        #4
        Originally posted by Lion View Post
        Form 5329 exceptions?
        Code 12 on Form 5329 covers COVID-19 distributions. Follow RR’s advice - use 8915E to elect to report it all in 2020.

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          #5
          Originally posted by Florida_EA View Post
          Client is an individual taxpayer who took out 3,000 from his IRA under the COVID 19 relief. Client received the 1099R stating that it is a taxable distribution. Client wants to pay tax but not the 10% penalty in the 1040. How do you tell the IRS that this is a COVID 19 distribution and hence not subject to the 10% penalty
          When you report the distribution on Form 8915-E, you are not require to file Form 5329 for the additional tax. This is per the Draft Instruction for From 8915-E
          Your tax software should handle this automatically

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            #6
            Has Form 8915E been updated in all tax software. I am not able to locate it in cch pro fx.

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              #7
              Originally posted by Florida_EA View Post
              Has Form 8915E been updated in all tax software. I am not able to locate it in cch pro fx.
              I use Lacerte, the form in the software, just not updated yet--say DO NOT FILE.

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                #8
                It is still a Draft form on the IRS web site so cannot be filed yet.

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