Covid Withdrawal

Submitted by Anthony Perrone on Thu, 2020-12-03 21:38

If somebody wants to start adding money back in, what is the process to a $100,000 COVID withdrawal on an IRA, what’s the process of putting the money back in?

Thank you.



Submitted by Alan - IRA critic on Thu, 2020-12-03 22:29

  • When you repay to the IRA account, be sure to tell the custodian of the repayment because they will have to code it as such on Form 5498, and NOT as an ordinary rollover. You will then report the repayment on the applicable 8915 form for the year to which the repayment is allocated. You have until the due date plus extensions to repay and have the repayment credited to the applicable tax year. If you do not plan to file an extension, and want the repayment credited to 2020, you must make the repayment by 4/15/2021. You can then report both the CRD and the amount repaid on your 2020 8915 E. 
  • Say you took a 100k CRD by 12/30/2020 and repaid 30k by 4/15/2021. You elect the 3 year income spread.  You would then have taxable income of 33,333 less 30k  =3,333 for 2020 because repayments are first allocated to the year of repayment.  If no further repayments, your CRD income for 2021 and 2022 would be 33,333 each.  Remember, if your IRA has basis (Form 8606), the taxable amounts will be reduced somewhat.

Submitted by Anthony Perrone on Mon, 2022-01-03 21:42

Do you have to put the money back into the exact IRA the money was withdrawn from, or as long as it gets put back into an IRA it is ok?

Submitted by Alan - IRA critic on Mon, 2022-01-03 23:39

The repayment can go into any eligible retirement plan, but should be reported to an IRA custodian as a CRD repayment so they can code it correctly on Form 5498 Boxes 14a and 14b.
See p 13 of the attached Notice 2020-50:
n-20-50.pdf (irs.gov)

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