New Form Used to Report COVID-19

Filers get a new form to report a COVID-19 retirement-related easing. The 10% fine on pre-age 59 ½ payouts from retirement accounts in 2020 is waived on up to $100,000 of Coronavirus-related distributions from 401(k)’s, 403(b)’s and IRA’s. Tax on these distributions can be paid over three years, beginning with the payout year, unless the individual elects to pay the tax all at once. Amounts recontributed within the three-year time span won’t be taxable all at once. They will be treated as rollovers.

Individuals use Form 8915-E to spread the tax on these payouts. Income tax paid on distribution that is later rolled over within three years of the payout can be recovered by filing an amended return on Form 1040-X.

Small Business Tax Strategies
October 2020