2021 Corona Related Retirement Distribution

Forum|Forum|4 years ago
February 4, 2022
3 replies
18 views

Forgive me if this has already been asked. I know the form is probably not available yet, but has anyone heard that the Corona-Related Disaster Retirement Distribution that eliminates the 10% early withdrawal period been extended into 2021? If they made a virus related distribution in 2021, is it exempt from the 10% early withdrawal penalty? I am hearing different things. If so, is that form going to be available when the 8915-F is available?

ProSeries Basic

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J

jeffmcpa2010

Level 10

I have seen the question asked, I think it would be on form 5329 which appears to be active in the software at this point.

T

TaxGuyBill

No, there is no Cornavirus distribution penalty exception for distributions in 2021.

qbteachmt

Level 15

You might be hearing different things, but let's restate this so it makes sense to you.

"eliminates the 10% early withdrawal period"

For 2020, the withdrawal is not considered Early if it qualifies under the disaster requirements, including covid.

The penalty is not taken "over" any amount of years. The Income reporting for tax consideration is what optionally was deferred over three years.

"been extended into 2021? If they made a virus related distribution in 2021, is it exempt from the 10% early withdrawal penalty?"

There is no covid disaster beyond 2020. There are other disasters, of course.

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