Recontribution of CARES Act Distribution

[Brian EA]

Client took a distribution of $100,000 on 12/31/2020 from his 401k plan and hopes to recontribute the funds in the next 3 years.
According to Fidelity the recontributing funds can be placed in an eligible retirement plan or an IRA within 3 years after the date of the original withdrawal.
The distribution is reported on Form 8915-E.
The question is where is the Recontribution reported.
Thanks
Brian

[TaxGuyBill]

It depends on if you include the entire income this year, or spread it out over 3 years. And if the client re-contributes all at once at the end, or spreads it out. But amended returns are often the method.

Start at "D" on Page 13 of Notice 2020-50 and keep going for a few pages.

https://www.irs.gov/pub/irs-drop/n-20-50.pdf#page=13.

[Lion]

Form 8915-E and its instructions are helpful, too.

[dtlee]

Client took a distribution of $100,000 on 12/31/2020 from his 401k plan and hopes to recontribute the funds in the next 3 years.
According to Fidelity the recontributing funds can be placed in an eligible retirement plan or an IRA within 3 years after the date of the original withdrawal.
The distribution is reported on Form 8915-E.
The question is where is the Recontribution reported.
Thanks
Brian

My understanding of the legislation is that it includes a distribution made on or after Jan. 1, 2020, and before Dec. 31, 2020.

Not going to say that the IRS will interpret it that way, but the legislation specifically excludes New Year's Eve.

[TaxGuyBill]

My understanding of the legislation is that it includes a distribution made on or after Jan. 1, 2020, and before Dec. 31, 2020.

Not going to say that the IRS will interpret it that way, but the legislation specifically excludes New Year's Eve.

Wow, that is interesting. You are right, that is what the CARES Act says.

I don't think the IRS has any room to "interpret" it. It seems quite clear that the law says New Year's Eve is not eligible. Unless Congress changes that, I think people who waited until December 31st are out of luck.

[New York Enrolled Agent]

Wow, that is interesting. You are right, that is what the CARES Act says.

I don't think the IRS has any room to "interpret" it. It seems quite clear that the law says New Year's Eve is not eligible. Unless Congress changes that, I think people who waited until December 31st are out of luck.

TGB - I agree - no mercy to be shown.

Clearly the legislation text controls, but even the instructions for Form 8915-E actually have the word “before” December 31 in bold on page 2.

[Rapid Robert]

I think people who waited until December 31st are out of luck.

Luck has nothing to do with it. They have poor judgment, to say the least. And I suspect plenty of them will cheat on their taxes and fraudulently claim the coronavirus-related treatment anyway.