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Stimulus checks and Qualified Disaster Distributions explained

Millions of Americans rushed to finish their taxes this year, but found themselves confused over things like stimulus checks.

tax forms for the irs to claim stimulus checks or report qualified disaster distributions

In addition to the stimulus checks, there’s something called a Qualified Disaster Distribution.

There are differences between the two that taxpayers need to be aware of.

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Qualified Disaster Distributions explained

A Qualified Disaster Distribution is any distribution that was paid out of a 401K plan on or after the first day of a qualified disaster.

It must have been between that day and June 25, 2021.

Americans could use the pandemic as a qualified disaster in all fifty states and Washington D.C.

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People were able to take out up to $100,000 from their retirement plans with no penalty.

There is no penalty for withdrawal. The money does count as taxable income on your tax return.

Form 1099-R is used to report that income.

Stimulus checks aren’t the same as Qualified Disaster Distributions

Stimulus checks are considered an advance on a refundable credit.

These do not count as taxable income.

If you received your check already then you do not need to worry about claiming it.

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