We have gotten a few questions with the tax code change this year. (There are many.)
Cashed out Retirement they receive a 1099R.
They can avoid the 10% penalty if they took the money out because of the pandemic. Also they can choose to average the tax treatment over three years.
On the 1099R, you have to scroll down and under # 5 Qualified 2020 Disaster Retirement Plan Distributions and Repayments mark that box, then the 8915 will populate.
On the 8915 there are some options in regards to the tax treatment. The amount that you are not paying the 10% penalty on and an option if you want to spread the tax treatment over 3 years.
These forms are new and if you are like us, you might need to read the forms a few times to completely understand them.
The above articles reference our Knowledgebase, where we have many additional solutions for you.