How can you pay tax on more than a third of the "covid related" early distributions without losing the waived penalty?

[Mrs S]

To mark the early distribution as covid related on the 1099R worksheet and then split the amount taxable over 3 year period is going to cause more tax with no withholding for future years. Client wants to pay more this year and would like to split in 2 years, not 3. It brings back the penalty if I try and pay tax on half the amount.

[qbteachmt]

"is going to cause more tax with no withholding for future years."

Huh? A client with no withholding should be making Estimated Payments, then.