Question
How can you pay tax on more than a third of the "covid related" early distributions without losing the waived penalty?
To mark the early distribution as covid related on the 1099R worksheet and then split the amount taxable over 3 year period is going to cause more tax with no withholding for future years. Client wants to pay more this year and would like to split in 2 years, not 3. It brings back the penalty if I try and pay tax on half the amount.
