What is form 8915E-T?
Form 8915E-T is used by taxpayers to claim refiled for payment of the taxes. If someone takes retirement distributions and wants to pay tax in installments over the next years, then this form would be required by him/her.
This distribution is for three years making it compulsory to pay taxes within three years. So, it’s a form of relief in terms of timing.
When 1099-R (reporting for the distribution of retirement benefits) is entered in TurboTax, a question is asked about the reason behind your withdrawal.
The question says whether the withdrawal is due to Covid-19. After answering it, the screen then displays the next question asking you whether you tested positive or negative.
When will Form 8915E-T be available on TurboTax?
The form was first released in 2020 to facilitate tax-payers during the time of the coronavirus. The form was then released in 2021 for people to pay their second installment.
Now, it is time for the third one, it had caused hassle among the people since the start of 2022.
The form is now available on the IRS site but its availability on TurboTax has created ambiguity among the people. The form was scheduled to be released on 24th March 2022 on TurboTax. It is because IRS takes time to make the forms available on the TurboTax website.
How does 8915E-T work?
The qualified 2020 disaster retirement plan distributions allow you to get favorable tax treatment by paying it in three installments.
You have to identify the qualified disaster for which you are filing form 8915-E. These disasters fall into two categories, one is the coronavirus and the next category involves those qualified 2020 disasters which are other than the coronavirus.
The form was scheduled to be available on TurboTax on March 24, 2022. You can file it if any of the three cases apply to you.
One is if you have received the qualified disaster distributions for coronavirus. Second, if you have received it for qualified disasters other than the coronavirus.
Third, you have received disaster distributions for constructing or purchasing a new home in qualified disaster areas.
Understanding the Mechanism of Form 8915E-T
The form was designed to facilitate people who were adversely affected by the qualified disasters in 2020.
It was also for the people who were affected by the coronavirus to get favorable tax treatment by receiving the facility of distributions. Its name with E was replaced with F for the year 2021 and the coming ones with subsequent letters.
While filling out the forms make sure you have the latest instructions with you because these instructions are replaced by the previous ones. You need to get updated with them to accurately fill out your form and pay your tax dues.
When to File this form
You need to file this form if any of the three cases applies to you. First, you have received the distribution related to Covid-19.
Second, you have received a 2020 distribution related to some other qualified disaster. Third, you have received qualified distribution in 2020 to purchase or construct a new home in the areas that come under qualified disasters.
What is a qualified disaster distribution?
The qualified disasters are different for each year. The qualified disasters for the year 2020 are described in Form 8915-E, and the qualified disasters for the year 2019 were mentioned in Form 8915-D.
Similarly, for the year 2018, they were mentioned in the form of that year which was 8195-C. These all forms also contain instructions about filling out the form accurately.
What were the qualified disasters for the year 2020?
There were two main categories in this regard. One is the coronavirus for which you can fill out the form and the second is qualified disaster other than coronavirus.
These two are the only qualified disasters for 2020 for which you can apply favorable tax treatment.
Some important instructions
Some important instructions related to the filling out form are given below.
Married filers
If a couple wants to file this form, then you cannot fill out a single form. Both need to have a separate form for themselves.
In case you file a joint return, you need to enter the name and SSN of the person whose information you have provided in the form.
Foreign address
In case you have a foreign address, enter the name of your city on the appropriate line. Do not add extra information on that specific line.
Use the spaces below that line to complete it. Do not use the abbreviation of the country, write its full name. Also, make sure to follow the country’s practice and then add the postal address, province, state, etc.
Disasters Names
If you are filing for coronavirus, check the box in Caution Part I of Form 8915-E. But if you are filing for other qualified disasters write the full name of it in the section of “Disaster Name” in Part I of the form.
Worksheet 2
If you are using worksheet 2, you need to write the name of every disaster you are reporting at the top of page 1 of the form.
You have to write the full name of those disasters, and if one of the disasters is coronavirus then you need to check the box that is there on Part I of Form 8915-E.
Additional tax
Qualified 2020 disaster distributions are not liable to a 10% additional tax on early distributions. But if you receive distributions exceeding the $100,000 limit, then it may be subjected to additional tax and is further reported to another form named 5329.
Conclusion
Form 8195-E is for the year 2020, and can be applied to any of the three cases. These three cases are qualified disaster distributions for coronavirus, for disasters other than coronavirus, and for purchasing or constructing a new home in qualified disaster areas.
The form itself contains detailed instructions to fill out the form. It grants you the liberty to pay your tax dues in three installments.
This form was first released in the year 2020 when the coronavirus was at its peak. For the year 2021, the letter E for the form was changed to the letter F.
Some special instructions pertain to married filers, foreign addresses, disaster names, worksheet-2, and additional taxes.
Frequently asked questions
What is the Turbo tax?
It’s software used by Americans to prepare an income tax return. It’s a well-known software used for the preparation of the tax return. Originally, it was developed by Michael A. Chipman and sold to Intuit in 1993.
What are the advantages of using turbo tax?
Turbotax makes it easier to prepare the tax return. Further, It’s comparatively cheaper to use Turbotax than to hire an accountant/CPA/Tax accountant.
In addition to this, you will not have to wait for days or weeks to complete your taxation process.
How does Turbotax work?
It’s like a cloud software program to calculate tax liability. However, you will be required to enter all the details for the income, expenses, assets, liabilities, and other details in the system to get an output that needs to be filed within IRS.
Further, it should be noted that all of your details are stored on the servers. Hence, these details can be retrieved and used when needed.
What’s the disadvantage of using Turbotax for tax computation/filing?
Following are some of the disadvantages of using the Turbo tax.
- If the software is not used properly, it might lead to errors in the filing process. So, if software calculates excess liability, you end up paying a higher amount, On the other hand, if the software ends up with a lower tax liability, it can lead to penalties and other repercussions.
- The accuracy of the software is dependent on the accuracy of the data entered into the system.
- You might miss some of the valuable deductions in the process of calculation.
- Not everyone may be competent enough to do research and apply new tax rules. Hence, one mustn’t ignore software limitations.
