IRA Relief in 2021 due to Covid?
Are there any waivers in effect for penalties (10%) or taxes due on distributions from IRAs in 2021, that are Covid related?
And what are the “Covid Related” reasons? Do they include actually have Covid, or having lost one’s job due to the pandemic?
Thanks!
Permalink Submitted by Alan - IRA critic on Tue, 2021-01-26 20:08
IRS Notice 2020-50 states the requirements to be eligible for a CRD (Covid related Distribution). The reasons are fairly broad and pick up several indirect consequences. If you qualify for a CRD, any distribution taken anytime from 1/1/2020 to 12/30/2020 can be reported as a CRD. A CRD automatically is exempt from the penalty, exempt from the IRA one rollover limitation, taxable income can be spread over 3 tax years, and repayment of all or part of the CRD is allowed up to 3 years from the distribution. Notice 2020-50 follows:
n-20-50.pdf (irs.gov)
A CRD must be reported on IRS Form 8915 E, which still remains only in draft status.