How do you report a 2021 repayment of a 2020 1099-R corona virus distribution?

[ClergyTaxMan]

How do you report a 2021 repayment of a 2020 1099-R corona virus distribution?

[RollTide68]

8915-F but it is not available in the software yet.

[ClergyTaxMan]

Thanks.  Do you know, by chance, when Form 8915-F will be available?

[Just-Lisa-Now-]

IRS just finalized it last week, takes a few weeks for Intuit to get their version of it approved by IRS and then added to he program.

[IRonMaN]

7,777,771

[TaxGuyBill]

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@ClergyTaxMan wrote:

How do you report a 2021 repayment of a 2020 1099-R corona virus distribution?

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Use non-Intuit software?

[ClergyTaxMan]

I use Intuit ProSeries Basic software.

[TaxGuyBill]

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@ClergyTaxMan wrote:

I use Intuit ProSeries Basic software.

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Right, and that is the problem.  Using Intuit software is what is causing the delay.  Other software companies have it available.

[ClergyTaxMan]

For 2021, the client's 1099-R Disaster distribution was reported on form 8915-E in the tax return, and I elected to spread the taxable amount reported over 3 years. So is 8915-F for 2021 the form the second portion of the taxable 2020 amount to overflow into?

[IRonMaN · Accepted solution]

Yes, but it still isn't ready.

[qbteachmt]

"For 2021, the client's 1099-R Disaster distribution was reported on form 8915-E in the tax return, and I elected to spread the taxable amount reported over 3 years. So is 8915-F for 2021 the form the second portion of the taxable 2020 amount to overflow into?"

For 2020 Tax Year, the form 8915-E applies for 2020 Disaster Years. Simply keep those two "years" in mind to know which Form applies.

8915-F is new. It is a Forever Form. It applies to Disaster Years 2020 and forward, for Tax Year 2021 and forward.

[TaxGuyBill]

I'm sorry, I just re-read your question and I may have misunderstood what you were asking.  Are you asking how to report a REPAYMENT of the distribution?  Or are you asking how to report the second taxable portion?

If you are asking about a repayment, was the entire distribution repaid in 2021?

[qbteachmt]

Oh, good catch! Someone else worded this oddly, as well:

"He came to me and wants to pay rest of his 2nd and 3rd payment in 2021"

"You mean, report the balance that is taxable, all in the second year. Just to clarify, because there potentially are other payments to make, but reporting for taxes to compute isn't the same as paying."

[ClergyTaxMan]

I need to do both. The client took three distributions from three retirement funds - Three 1099-R's all due to a job loss arising from COVID-19 cutbacks. That happened in tax year 2020, reported last year.  We chose to have all three 1099-R distribution incomes spread over three years.  Then the client started to pay the funds back, in 2021.   I need to report the payback of three 1099-R's (I do not know if the full amount was paid back in any of them).   So I have three,  spread over three years and 2021 will be the second portion.  Can all three distributions and paybacks be reported on the same form, or separate 8915-F's for each one.  How is the paybacks reported and how is the 2nd year of the distribution spread-out reported?  Thanks.

[rbynaker]

While you wait for the actual data from the client (and the form programming from Intuit) you should spend some time in the weeds with the form f8915f.pdf and instructions i8915f.pdf .  Part II is for non-IRAs, Part III is for IRAs.  With 3 1099-Rs you may have a mix of things.  In general, repayments are going to reduce the 2021 portion (33.3%) of the spread-out income.  So if your client has paid back < 1/3 of what came out then it all gets reconciled in 2021.  If it's more than that, then I think you can choose to either carry the repayment forward and reduce the 2022 taxable income or amend 2020 and carry it back.  If it's more than 2/3 then you'll do both.

Are we having fun yet?

Rick

[qbteachmt]

And it's not Tax Year repayment.

I like to read articles from account managers and from the web that are written to the consumer, as opposed to tax preparers. Example:

"The three-year period for recontributions begins the day after the coronavirus distribution (Day 1) and ends on the third anniversary of Day 1. So if you took a distribution from your retirement plan on June 1, 2020, the three-year period during which you can repay the withdrawal without it being taxed as income begins on June 2, 2020 and ends on June 2, 2023."

From: https://www.nolo.com/legal-encyclopedia/taxation-and-repayment-of-covid-19-related-retirement-distri...

I think you'll have to create a matrix, since it was three withdrawals. Repayments are the same as rollovers. Make sure to read all the qualifications.

[HTS20]

Am I understanding correctly the Form 8915-F isn't ready yet? It says 3/31/22.

[qbteachmt]

Here is what shows as of today:

Form 8915-F, Qualified Disaster Retirement Plan Distributions and Retirements (Spouse)	Final on 03/24/2022, EF on 03/24/2022
Form 8915-F, Qualified Disaster Retirement Plan Distributions and Retirements (Taxpayer)	Final on 03/24/2022, EF on 03/24/2022

[jenny j4]

I will like to know how to repay the second portion or how to report it/

[qbteachmt]

@jenny j4 

You repay it by repaying it; it's treated as a Rollover. Then, you can read the Form 8915-F instructions for how to handle reporting the Repayment, because it matters how much the taxpayer took as a distribution vs how much is repaid.

Or, if you are asking about Reporting the carry-over for income tax purposes, and not asking about Repayment, here is the help article:

https://proconnect.intuit.com/community/retirement-tax-credits-and-deductions/help/generating-form-8...

Everyone starting/reading these topics needs to understand the difference between Repayment and Reporting in the second year. You would think this would not be confusing, but this is at least the 4th topic where things are being stated unclearly.