Client withdrew monies due to ice storm in Texas in 2021. Dist. Code on 1099-R was 1. she wants to spread reporting over 3 yrs. I can't find where this can be listed on 8915. Is there another form that I nd to use?
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Bad news, from the Form 8915-F instructions:
"What Is a Qualified Disaster Distribution? <== QDD
For 2021, qualified disaster distributions are:
The qualified 2019 disaster distributions for the Puerto Rico Earthquakes (DR-4473-PR) reported on 2021 Form 8915-D, or
The qualified 2020 disaster distributions for qualified 2020 disasters reported on 2021 Form 8915-F (2020 disasters)."
I read various articles and I think this one is helpful: https://wilkecpa.com/qualified-disaster-related-distributions-from-retirement-plans/
"The qualifications to obtain a QDD are complicated. Before a QDD can be made, the following must occur:
The TX ice storm occurred in Feb. 11-21, 2021 (incident period) and was declared Feb 19, 2021.
Bad news, from the Form 8915-F instructions:
"What Is a Qualified Disaster Distribution? <== QDD
For 2021, qualified disaster distributions are:
The qualified 2019 disaster distributions for the Puerto Rico Earthquakes (DR-4473-PR) reported on 2021 Form 8915-D, or
The qualified 2020 disaster distributions for qualified 2020 disasters reported on 2021 Form 8915-F (2020 disasters)."
I read various articles and I think this one is helpful: https://wilkecpa.com/qualified-disaster-related-distributions-from-retirement-plans/
"The qualifications to obtain a QDD are complicated. Before a QDD can be made, the following must occur:
The TX ice storm occurred in Feb. 11-21, 2021 (incident period) and was declared Feb 19, 2021.
What all this article is about is that the fact that the Governor in Texas declared a disaster for all counties in Texas did not matter since President did not declare this county in East Texas a disaster and any withdraws client makes is not deductible and is subject to 10% penalty for early withdraw of IRA monies!
"since President did not declare this county in East Texas a disaster"
They had quite a list, at first, then added more counties, later.
Which didn't matter, since it falls outside of the covered incident period for the Law that would give them the provisions they wanted to use. These are not always available; it's not a regular part of IRS code. They needed to be codified. You know of the CARES Act provision for "covid disaster."
This particular provision is in the CAA:
"The Consolidated Appropriation Act (CAA) defines qualified disasters as a major disaster that the President declares during the period beginning on January 1, 2020, and ending on February 25, 2021, but which must have occurred between December 28, 2019, and on or before December 27, 2020, and during the period specified by the Federal Emergency Management Agency (FEMA) as the period during which the disaster occurred (the “Incident Period”)."
The President did declare all of Texas as a disaster area on Feb. 14, 2021. The problem now is that the form 8915-F to enter loss in is not available with Lacerte. W hen can one expect Lacerte to download this for so my client can file his tax return?
Fema number is - FEMA-3554-EM effective 02-14-21
"The President did declare all of Texas as a disaster area on Feb. 14, 2021."
Once more:
The TX ice storm occurred in Feb. 11-21, 2021 (incident period).
"which must have occurred between December 28, 2019, and on or before December 27, 2020,"
According to the CAA.
And per the IRS, from the Form 8915-F instructions:
"What Is a Qualified Disaster Distribution? <== QDD
For 2021, qualified disaster distributions are:
The qualified 2019 disaster distributions for the Puerto Rico Earthquakes (DR-4473-PR) reported on 2021 Form 8915-D, or
The qualified 2020 disaster distributions for qualified 2020 disasters reported on 2021 Form 8915-F (2020 disasters)."
"Dist. Code on 1099-R was 1. she wants to spread reporting over 3 yrs."
There is no law that offers what you seek. Do not confuse Qualified Disaster Distribution and Disaster Loss. These are different provisions.
For Disaster Loss, this is the IRS article: https://www.irs.gov/taxtopics/tc515
For a qualified disaster distribution and the three-year reporting option, this was proposed in June 2021: H.R.3954
https://www.congress.gov/bill/117th-congress/house-bill/3954/text?r=1&s=1
(4) INCIDENT PERIOD.—The term “incident period” means, with respect to any qualified disaster, the period specified by the Federal Emergency Management Agency as the period during which such disaster occurred (except that for purposes of this Act such period shall not be treated as beginning before December 28, 2020, or ending after the date which is 30 days after the date of the enactment of this Act).
...
(5) INCOME INCLUSION SPREAD OVER 3-YEAR PERIOD.—
(A) IN GENERAL.—In the case of any qualified disaster distribution, unless the taxpayer elects not to have this paragraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable-year period beginning with such taxable year.
So, watch that bill; if it passes it will have retro-active effect to your taxpayer.
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