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How is the 10% penalty being excluded on the tax return for those who made early withdrawals from their retirement plans in 2020 due to the Corona virus?
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A number of forms/schedules have yet to be finalized by the IRS/states. Once that's done, each software developer still needs to finalize its versions of those forms for IRS/state approval. Until then, returns you prepare will be incomplete, missing various elements.
Hang tight for now. You can bank on it that something this major will not be missed by Intuit.
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Form 8915-E
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That form does not seem to be updated. I do not see anywhere how to waive the 10% penalty. I just tried with one example and maybe I need to try deeper. If somebody knows, please share. It will be appreciated. Thank you.
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A number of forms/schedules have yet to be finalized by the IRS/states. Once that's done, each software developer still needs to finalize its versions of those forms for IRS/state approval. Until then, returns you prepare will be incomplete, missing various elements.
Hang tight for now. You can bank on it that something this major will not be missed by Intuit.
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go to form 1099-r input, about 1/3 page down is a qualified disaster distribution worksheet, there is an entry box for corona virus distribution under letter 'A'. hope this helps!
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I saw that yesterday but it does not waive the 10% penalty. I tried with an example unless it is not updated yet but as of now, it does not waive the 10 % penalty. But thanks anyway, I thought it is going to be there but I am not sure.
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I also tried the 5329 which is where regularly there are choices to exclude the penalty but I did not see anything related to this special waiver, maybe they are updating it. We will see. And I also tried the 8915E. They will fix, this is a major issue I believe.
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if you click on that box--you are right--however a 'yellow 'dialog box pops up and says not to file because program needs to be updated
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Thank you Chase, changing the topic,
what do you think about our discussion about the EITC, it has been stressing to me and the IRS is not helping. About the provision to use the the earned income from 2019 for 2020. Nobody seems to have the truth. I invite you to join the debate. I hope they clarify all this.
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Hi, This topic regarding the EITC look back provision has been stressing me as well. Can you let me know how I go about joining the discussion. Much Thanks!
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The "truth" could be right in front of you in the Act and the Code. For some added colors, you may like to take a look at the discussions in these two threads:
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I have tried as well as I have a few clients that want to file early, but have told them to hold off for now until we see an update in the software.
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"I have a few clients that want to file early"
The IRS isn't even accepting individual returns until Feb 12.
You have all of this available to you through your program resources.
https://proconnect.intuit.com/proseries/forms-finder/
Bookmark these resources. Use them often.
I use Ctl F, then select that the global option is to Highlight, then enter 8915. Not any specific letters.
Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments (Taxpayer) | Final on 02/18/2021, EF Not Allowed |
"Filing early" isn't going to go well for these people. Paper filing takes forever to be processed.
Don't yell at us; we're volunteers
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Intuit dropped a not that they would open business filings as of January 19, 2021 and for individuals Intuit began holding returns as of January 28th. For some of these clients they are trying to get financing and banks are requesting tax returns. Although we have informed these lending institutions that the IRS will not process these returns until Feb 12th, they will accept draft tax returns. Would be nice if they would have finalized forms for the 2020 filing, but that has yet to happen. Try telling a banker/loan officer why we cannot file yet and see how that conversation goes, haha. They are in no way tax connoisseurs. For those that have taken early distributions from 401K's, we will wait until the updates are available. As you may see, your clients don't care why they can't file, only that they cannot file yet, and they are not too happy about that. Especially when these returns are holding up the lending process.
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To be fair, the IRS and states have not finalized all their forms and instructions. How could Intuit then publish theirs?
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