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Is form 8915-F needed when all tax was paid in 2020?


Pacun

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As we know, the easiest way for the numbers to flow to correct locations is to have both 8915-E and 8915-F along with 1040 when working with a client.  In any event, going back to my question: Is form 8915-F still needed when the client decided to pay all taxes in 2020? The reason of my question because of this:

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Also, It seems that using form 8915-F, the client, who decided to pay all taxes in 2020, can change his mind and deposit back some money now for 2021 and/or 2022. It seems that this can be done without amending 2020.

AS someone mentioned about making stupid mistakes on another post, I calculated the return and this retired person didn't owe anything to MD, but when I removed form 18915-E, I had to enter the amount being reported as taxable, and I did it on the wrong worksheet and now he owned MD more than $700.  The federal amount owed was still correct but MD doesn't tax distributions (in this case) it is comes from 401k and I entered it as IRA by mistake. I wonder how if other states do the same.

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If they repay any of the distribution now, I think you will need to amend 2020 to get a refund of the tax paid on that amount.  They cannot reduce their 2021 income by the repayment amount unless they had spread the income over 3 years and so have income in 2021 from the distribution.  In your case, they have to go back and reduce 2020 income.

For your case (repayment when all tax was paid in 2020), the instructions say you must also file 8915-F in 2021 and fill out lines 14 and/or 25 (only).  It's not really clear why, since it will not affect the 2021 return.  Apparently, just for documentation.

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50 minutes ago, TexTaxToo said:

 

For your case (repayment when all tax was paid in 2020), the instructions say you must also file 8915-F in 2021 and fill out lines 14 and/or 25 (only).  It's not really clear why, since it will not affect the 2021 return.  Apparently, just for documentation.

When form 8915-F is required, you have to pdf it and attach it. So, I doubt it will be needed if everything was paid in 2020 unless the client changed his mind and wants to re-invest the 1/3 or less of the distribution.

They way I understood it last years was: you have a choice, pay everything this year and you are done. Or pay or re-invest 1/3 and do the same in 2021 and 2022. 

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