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Level 5
March 1, 2021
Question

Penalty on early distribution due to corona virus

  • March 1, 2021
  • 3 replies
  • 18 views

It seems if taxpayer chooses to pay the tax on an early distribution over 3 years the early distribution penalty goes away but if they want to pay the tax on the total distribution this year the penalty remains.  What am I missing here ?

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3 replies

IRonMaN
Level 15
March 1, 2021

I haven't tried one yet, but go to form 5329 and use the "other" exception.

Slava Ukraini!
Level 5
March 1, 2021

Thanks

TAXOH
Level 10
March 1, 2021

Mark the 1099R worksheet for 2020 Coronovirus related Distribution then on the 8915-E in part I where it says Taxable 3 year spread smart worksheet check the box to not spread over 3 years.