A tax client took his 401K retirement funds as a lump sum because he lost his job due to the pandemic. His 1099-R shows the income tax taken out,but it includes the 10% penalty. While preparing his return the 10% penalty was deducted from his refund. How or what do I do to get that penalty taken off. What form do I need to use or how do I go about doing this?
The form 8915-E to indicate this is a qualified disaster distribution is scheduled for 2/25. You also need the form 5329, because you need to show if the tax is being spread over three years or all in this one year.
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