Covid Related Distribution taxation and rollback | Ed Slott and Company, LLC

Covid Related Distribution taxation and rollback

I'm trying to understand the taxation gymnastics.

If I take a CRD in 2020 of $30k and use the 3 year spread on taxes ($10k 2020/$10k 2021/$10k/2022) and I roll back $10 in by the end of the year of 2020, does that -0- out my 2020 taxation and I continue on with $10k in 2021 and $10k in 2022 OR does my 2020 taxation get recomputed based on the net left ($20) spread over three years (2020/21/22)?

Perhaps there is some other crazy math...........

Form 8915 E (not yet released) will apply the 2020 repayment to the 2020 income. Therefore, there will be no CRD income for 2020, and 10k each for 2021 and 2022. This is how prior 8915 instructions have operated and the IRS has been clear that CRDs will follow the rules established for past disaster distributions and earlier versions of Form 8915.  Actually, you have until your tax due date plus extensions to make this repayment and still have it credited against your 10k of 2020 CRD income.

 

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