“I pulled out $30,000 from my IRA due to Covid back in 2020. My understanding was I could put that back and get a refund of taxes paid. How do I do that?” We helped out a reader during the tax season.
Q.: Hi Dan. I pulled out $30,000 from my IRA due to Covid back in 2020. My understanding was I could put that back and get a refund of taxes paid. How do I do that?Where's the best place for me to retire New updates: Results by county; filter by politics, snowfall and more
on Form 8915-E of your 2020 tax return. Form 8915-E is also used to account for CRD amounts paid back into an account. You should talk with your tax preparer about the best way for you to tackle the accounting, but the rules can be accessed via IRS Notice 2020-50. If you used the default method which spreads the income evenly over three tax years, you would only have reported $10,000 on your 2020 return, $10,000 would be set to be reported on your 2021 return and $10,000 would be reported on your 2022 return.
Now, if you are only paying back $15,000 of the CRD, the process is a bit different. If you were to make that repayment before you file your 2021 tax return, you would not report the $10,000 on your 2021 return even though the repayment was made in 2022. The additional $5,000 can be used to offset the $10,000 you will report on your 2022 return, or you can amend your 2020 return and adjust the income down $5,000.
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