Special rules regarding withdrawals and repayments from certain retirement plans provided relief to taxpayers who suffered an economic loss as a result of Hurricane Katrina, Rita, or Wilma and applied to distributions received before 2007 as qualified hurricane distributions. Although, qualified hurricane distributions had to be included in income before 2009, certain 2006 distributions could be repaid through 2009.
If you received a qualified hurricane distribution, the taxable amount is figured in the same manner as other distributions (see the sections on Cost
, Taxation of Periodic Payments
, and Taxation of Nonperiodic Payments
, earlier). However, the distribution was included in income ratably over 3 years beginning with the year you received the distribution, unless you elected to report the entire amount in the year of distribution. You can repay the distribution and not be taxed on the distribution.
Form 8915, Qualified Hurricane Retirement Plan Distributions and Repayments, is used to report repayments of qualified hurricane distributions.
For information on other tax provisions related to these hurricanes, see Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma.taxmap/pubs/p575-007.htm#en_us_publink1000226994taxmap/pubs/p575-007.htm#en_us_publink1000226995
Most 2006 qualified hurricane distributions are eligible for repayment to an eligible retirement plan (defined later). Payments received as a beneficiary (other than a surviving spouse), periodic payments (other than from IRAs), and required minimum distributions are not eligible for repayment. Periodic payments, for this purpose, are payments that are for (a) a period of 10 years or more, (b) your life or life expectancy, or (c) the joint lives or joint life expectancies of you and your beneficiary. For distributions eligible for repayment, you have 3 years from the day after the date you received the distribution to repay all or part to any plan, annuity, or IRA to which a rollover can be made. Within the time allowed, you may make as many repayments as you choose. The total amount repaid cannot be more than the amount of your qualified hurricane distributions. Amounts repaid are treated as a qualified rollover and are not included in income. The way you report repayments depends on whether you reported the distributions under the 3-year ratable method, or you elected to report the distributions in the year of distribution.taxmap/pubs/p575-007.htm#en_us_publink1000226996
If you elected to include all of your qualified hurricane distributions received in a year in income for that year and then repay any portion of the distributions during the allowable 3-year period, the amount repaid will reduce the amount included in income for the year of distribution. If the repayment is made after the due date (including extensions) for your return for the year of distribution, you will need to file a revised Form 8915 with an amended return. See Amending Form 8915
Maria received a $15,000 qualified hurricane distribution on November 10, 2006, from a section 457(b) plan. She elected out of the 3-year ratable method for reporting distributions on Form 8915 and included the entire $15,000 in gross income for 2006. On October 31, 2009, she repays $15,000 to the plan. She must file an amended return for 2006 to reduce her gross income by the $15,000 repayment amount and a revised Form 8915 to report the repayment. taxmap/pubs/p575-007.htm#en_us_publink1000226999
If you reported the distribution in income ratably over the 3-year period and you repay any portion of the distribution to an eligible retirement plan, the repayment may be carried back to reduce the amount included in income in previous years. After 2008, qualified hurricane distributions are no longer required to be included in income.taxmap/pubs/p575-007.htm#en_us_publink1000227000
John received a $90,000 qualified hurricane distribution from his pension plan on November 15, 2006. He did not elect to include the entire distribution in his 2006 income. He included $30,000 of the distribution in income on his 2006, 2007, and 2008 returns. On November 8, 2009, John repays $45,000 to an eligible retirement plan. He makes no other repayments during the allowable 3-year period. John may carry back the repayment and reduce the amount previously included in income by amending his 2006, 2007, or 2008 return.taxmap/pubs/p575-007.htm#en_us_publink1000227001
An eligible retirement plan could have been any of the following.
- A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan).
- A qualified annuity plan.
- A tax-sheltered annuity contract.
- A governmental section 457 deferred compensation plan.
- A traditional, SEP, SIMPLE, or Roth IRA.
For more information, including information about a distribution limit and a definition of main home, see the Form 8915 instructions.
If you make a repayment in 2009, the repayment may reduce the amount of your qualified hurricane distributions that were previously included in income. You will need to file an amended tax return to refigure your taxable income.
Include the repayment on your 2009 Form 8915. You can file an amended return for 2006, 2007, or 2008 if either of the following applies.
- You elected to include all of your qualified hurricane distributions in income for 2006 (not over 3 years) on your original return.
- You received a qualified hurricane distribution in 2006 and included it in income over 3 years. You can only make a repayment if it is made within 3 years after the distribution was received. You can amend your 2006, 2007, or 2008 return, if applicable, to carry the repayment back.
File Form 1040X to amend a return you have already filed. Generally, Form 1040X must be filed within 3 years after the date the original return was filed, or within 2 years after the date the tax was paid, whichever is later.