Split Pension Withdrawal from 2020 tax year

[athaureaux6]

Hi online community, does anybody know if there is going to be an update about the transfer of 1/3 of the pension amount for the people who split the withdrawal in 2020. I do not have too many of those but I wonder what it is going to happen to that 1/3 when it gets transfered. Is it going to be subject to the 10% early distribution penalty? That is my concern if I do it manually. Thank you for your responses. 

[Just-Lisa-Now-]

That form  (8915E) was showing that it would be final near the end of February, now it just shows Not Final at the top.   No 10% penalty, same as last year.  

[athaureaux6]

Thanks Lisa

No 10% specifically for that 1/3 from 2020 or no 10% for any distribution at all? I think somebody said for the new 2021 distribution before retirement age the penalty is back? Just trying to know. Thank you again.

[Just-Lisa-Now-]

I haven't seen anything about penalty waiver for early distributions in 2021. I take my Fed and State tax update classes today and tomorrow, we'll see what they managed to sneak in!

[athaureaux6]

Thanks Lisa

[qbteachmt]

The covid disaster provision that allowed the 2020 distribution as reportable income optionally being split into three years for tax reporting is not subject to penalty, because it is not considered an early distribution. So far, there is no similar provision for 2021 new distributions.

The Form 8915 series is meant for you to keep using for each disaster "year" and that's why you will continue to use the -E for 2020, for all the years where an event qualified and was reported on the -E in the first place.

Hope that helps.

[qbteachmt]

Update:

The Form 8915-E (2020 Disasters) is replaced with the -F (forever form) for tax year 2021. I documented it here:

https://proconnect.intuit.com/community/tax-talk/discussion/form-8915-e-will-now-be-8915-f/01/186194...