Taxpayer's husband died of Covid19. She received a 1099R with Code 4 (death). Does she qualifies for the penalty forgiveness ?

Forum|Forum|5 years ago
April 23, 2021
4 replies
23 views

She was given 199K. I haven't been able to find much information for this case in specific, I know the maximum withdrawal was 100K or less, but does she qualifies for the forgiveness for 100K and the 99K does not? Or she does not qualifies at all.

My thinking is that this withdrawal was necessary for the spouse and family to survive and the cause was death directly related to Covid 19.

Thank you VERY much for any help you can give me.

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sjrcpa

Level 15

Sad.

Ask her why she took it - (as opposed to rolling some of it over).

No penalty for distribution on account of death.

The more I know the more I don’t know.

Y

YadirAuthor

Level 3

Thanks. $40K were witheld in taxes. She needs to pay those right? As far as I know this is fully taxable even with covid 19 related.

qbteachmt

Level 15

If you intend to claim some of this as Partial Distribution under normal codes and Partial Distribution under coronavirus disaster provisions, make sure you read Form 8915-E instructions:

https://www.irs.gov/pub/irs-pdf/i8915e.pdf

Don't yell at us; we're volunteers

BobKamman

Level 15

It's not "forgiveness" for the 100K -- although the 10% additional tax does not apply in any year for any reason -- your question is whether that amount can be deferred over 3 years. I haven't had to deal with any of those, but I don't know of a reason it can't be.

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