Level 4

Can 2020 return be amended to include 8915-E that was not included with original return?

Forum|Forum|4 years ago
May 13, 2022
3 replies
17 views

Taxpayer took a distribution from a 403b plan in 2020 and intends to repay it to the plan within the three-year window for qualified disaster distribution repayments. Thinking that this was a loan, he didn't think that he needed to report it and the income was not included on his 2020 tax return nor was a Form 8915-E included.

Taxpayer received a notice from the IRS looking to add the distribution to income. Taxpayer intends to use the three-year income inclusion option, so he is not trying to opt out which would have required a timely filing of this election.

Does an original 8915-E form have to be timely filed or can it be originally filed with an amended return?

This topic has been closed for replies.

qbteachmt

Level 15

"Taxpayer intends to use the three-year income inclusion option"

That's the default, not the elective option. The election cannot be used, now.

If there was a 1099-R, it's not a loan. You would have noticed if there was a 1099-R, though.

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toddcbadAuthor

Level 4

I stated that he is using the three year option to be clear that we understood that a late election for a one year option is not desired and is not allowed by the code.

Yes, I am aware that there is a 1099-R that the client did not include on their tax returns.

Still looking for an answer to the question.

qbteachmt

Level 15

It's not an option to go with the three-years; it's the default. Yes, you need to amend 2020, if there was a 1099-R that was overlooked.

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TaxGuyBill

Level 15

Yes, you can amend to file 8915-E to avoid the 10% penalty and to allow the repayment within 3 years.

However, be aware that if the taxpayer repays the amount, you may need to amend it AGAIN to remove the 1/3 of the 1099-R.

qbteachmt

Level 15

"you may need to amend it AGAIN to remove the 1/3 of the 1099-R."

That's a good point. Since the distribution was in 2020, we are half-way into that third year right now. I would find out when he intends to make any payment and for how much, to take that into consideration for the amendment you would be preparing now.

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toddcbadAuthor

Level 4

Further question: How do you actually amend a 2020 return to show the repayment?

Taxpayer repaid the entire amount in 2022. Since the distribution was spread over three years, there would not be anything included in the 2022 return but need to carry back the excess repayment to 2021 and 2022. This is the amended return for 2020 and 2021.

But, what part do you actually amend?

81915E has line 10 but its for repayment before the due date of the return and specifically states not to include repayments made later than the due date.

So, where do you put the repayments made after the due date of the return when amending?

qbteachmt

Level 15

From the instructions:

"If you make a repayment in 2021 after you file your 2020 return, the repayment will reduce the amount of your qualified 2020 disaster distributions included in income on your 2021 return if you have spread the income over 3 years, unless you are eligible to amend your 2020 return."

I thought we were catching this before you filed the 20211 return?

Read the part of Amending the 8915-E. Of course, they likely meant you use the 8915-F for your 2021 return, marking that this is a 2020 Disaster. You only use 8915-E if you are filing a 2020 tax return or amending it.

Don't yell at us; we're volunteers

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toddcbadAuthor

Level 4

2021 was filed without the 1/3 distribution as well. It will also need to be amended.

Need to amend 2020 and 2021.

Need to amend 2020 to claim that it was a disaster distribution. Also need to amend 2020 to show that it was repaid - perhaps in the same amendment. The first step will add Form 8915-E to the return to avoid the 10% and to spread the income over 2020, 2021, and 2022.

My problem is that I also want to amend 2020 to show that it was repaid and thus back out the 2020 income that is 1/3 of the distribution. I just don't know what exactly to amend to show this. The money was put back in which is essentially a rollover but I can't find anything that says to make it look like a rollover on the amended return.

So I need to:

Amend 2020 to show disaster relief distribution of 1/3 and no penalty.

Amend 2020 to show repayment and back out the 1/3 relief distribution.

Amend 2021 to show income for 1/3 of the 2020 distribution.

Amend 2021 to show repayment and back out the 1/3 relief distribution.

Don't mess up 2022 when it comes time to file it. This one should be straight forward since the payback has happened before the 2022 filing deadline.

Again, I am just trying to figure out what to amend on the 2020 return to back out 1/3 of the distribution since it was repaid in 2022. Perhaps it is to show it as an indirect rollover but I can't find anything that says that this is the way to do it.

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