3 year tax on COVID distribution

CARES Act says tax is ratable over three years. lets say he pays back the distribution in year 3. what happens to the tax paid?  

We're taking the position that the participant needs to handle it.  It might mean amending their past returns to recoup taxes paid - unless the IRS comes up with a different approach (doubtful IMHO).

37 minutes ago, MoJo said:

We're taking the position that the participant needs to handle it.  It might mean amending their past returns to recoup taxes paid - unless the IRS comes up with a different approach (doubtful IMHO).

not a CPA but wouldn't the taxpayer be able to use the taxes paid as a credit to apply to income for that year?

18 minutes ago, k man said:

not a CPA but wouldn't the taxpayer be able to use the taxes paid as a credit to apply to income for that year?

I'm not a CPA either - but I would expect that there may be various ways to recoup.  Depends on the amount of taxes one owes as to the best way to recoup it.  Taxes on $100k - even if spread over three years might be more than one needs to pay in total.  Might be best to get a refund rather than eat it up over time.

How do you get a credit if you don't amend the prior return?  I've seen a couple of articles/blurbs and it is pretty clear that you have to amend your prior return(s) to get the refund (or credit against then-current taxes I suppose).

See page 2 of the Form 8915-B instructions for an analogous situation:

https://www.irs.gov/pub/irs-pdf/i8915b.pdf

Any repayments after the first year will reduce the amount of ratable income included in the year of repayment. Any repayment in excess of that year's ratable taxable amount can be carried back (by amending prior year's return) or forward.