3 Year Payback Schedule on IRA Withdrawals

Submitted by Brian Kuhn on Thu, 2020-11-05 21:29

Is this any withdrawal from an IRA this year, or do they have to meet certain extra circumstances? Is there a good explanation of this CARES ACT provision?



Submitted by Alan - IRA critic on Fri, 2020-11-06 01:30

  • Yes, see p 4 in the attached link which defines eligibility for a CRD (corona virus related distribution). You must qualify for a CRD and complete the distribution by 12/30/2020. You can then report the distribution on Form 8915 E and decide whether to report the 1099R income in 2020 or 1/3 each year 2020-2022. You also have 3 years to repay any portion of the CRD to an accepting plan to reduce your tax for the repayment year, or if you repay near the end of the 3 years, you will have to file amended returns for a refund of taxes previously paid.  Notice 2020-50:
  • https://www.irs.gov/pub/irs-drop/n-20-50.pdf

Submitted by David Mertz on Fri, 2020-11-06 02:52

To be clear, not just any IRA distribution in 2020 qualifies for 3-year repayment.  Only a distribution made in 2020 that qualifies as a Coronavirus-Related Distribution as defined in the CARES Act (or as a qualified 2018 or 2019 disaster distribution, but I don’t think that these are the subject of this question) qualifies for 3-year repayment.

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