Repayment of Retirement Distribution in 2020 LaCerte

[jknecht]

Hello All...As I understand it, we have to file amended returns for the year in which the taxpayer is repaying the distribution, that they took in 2020 as part of the COVID relief package.

In the 2020 LaCerte module there are only 2 entry points to show repayment.  Both on 13.1 and the first is called "Repayments made on or before 12/31/2020"....the other box is "Repayments made after 12/31/2020 but before filing return."

Since this is an 'Amended Return" I am assuming we can use the SECOND field as the repayment is technically being made before the "Amended Return" is filed.

Thoughts?  Confirmations?

[qbteachmt]

Was the repayment on/before Dec 31, 2020, or after?

Amending isn't the issue. Date is the issue. Repaid in the same year you took it, or repaid later.

[jknecht]

So the repayment was after Dec 31, 2020 as per the law allows.  Just like there is a question there for if the repayment happened before the "filing."  So, I assume I can use that one, since it is happening before the Amended filing (ie the filing in which I am claiming the repayment).  Lots of people repaid before filing the 2020 returns (up until Oct).

If I indicate in the 2021 tax module the amount repaid, it will all go towards year 2 and 3.  The IRS directive indicated we should amend past years once repaid.

My issue is that LaCerte doesn't have another place to enter it except in that second row (before the filing).

Does this make sense?

[qbteachmt · Accepted solution]

"The IRS directive indicated we should amend past years once repaid."

Not exactly. You may amend, under specific circumstances, which is not "because it was repaid" but because it is repaid timely and the inclusion in income compared to the repayment qualifies for amending.

"The timing of your distributions and repayments will determine whether you need to file an amended return to claim them."

"If you make a repayment in 2021 after you file your 2020 return, the repayment will reduce the amount of your qualified 2020 disaster distributions included in income on your 2021 return if you have spread the income over 3 years, unless you are eligible to amend your 2020 return."

So, it was repaid in 2021 before or after the 2020 due date including extensions (were they in yet another declared disaster)?

As I pointed out, the Date matters. Not the Amending or the fact that there was a repayment; it's when was it repaid, that matters. It's sort of the other way around from how you stated it.

The Form 8915-E goes with the 1040 or 1040X, so sending it to claim the repayment changed something means you are filing it "on time" as long as this qualifies for amending.

But you already told us it was repaid after Dec 31,2020:

"Both on 13.1 and the first is called "Repayments made on or before 12/31/2020"....the other box is "Repayments made after 12/31/2020 but before filing return.""

It seems the second box applies, based on Date. As long as you read all the eligibility and qualification for amending. You don't amend because there is a repayment. You amend because the repayment qualifies.

[jknecht]

@qbteachmt THANKS.

Since there are Energy credits and more involved the best way to keep all of those accurate based on the appropriate repayment is to amend. 

Thanks for confirming my thoughts.