Strange message about "disaster distributions" in TurboTax review section - should I wait to file?

I'm trying to finish up my taxes and got the weirdest message during the "review" section of TurboTax. It's telling me I can't file right now because of some "disaster tax relief laws passed by Congress" and that "taxpayers like me" could get a "better tax outcome" if I wait. The message basically says to just wait until TurboTax "lets me know" when I can file. Does that seem right? I'm honestly terrible with anything financial and tax-related, so I'm wondering if I screwed something up when entering my info or if this is legit. It seems pretty odd that TurboTax would personally email me like "Hey buddy, we're good to go now!" but maybe that's normal? I have no clue if I should just wait or if I messed something up. Any help would be super appreciated! I'm completely lost here.

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19 comments

Carmen Flores

•8M

This message is actually legitimate and you didn't do anything wrong! The "disaster distributions" notification relates to special tax provisions for people affected by federally declared disaster areas. Throughout 2024, there were several major disasters (hurricanes, floods, wildfires) where affected taxpayers became eligible for special tax treatment on retirement withdrawals and other relief. TurboTax is essentially telling you that based on your information, you might qualify for these special provisions that could give you a better tax outcome. The software is being updated to properly handle these new provisions that Congress passed relatively recently. I'd recommend logging back into TurboTax in about a week to see if the update has been completed. You can also check if you live in a federally declared disaster area by visiting the FEMA website. If you don't think you were affected by any disaster, it might be worth reviewing the information you entered - perhaps a zip code or address triggered the system.

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Carmen Flores

•8M

The qualification is usually based on specific counties that were designated as disaster areas, not the entire state. FEMA maintains a list of declared disasters by county and state. For California wildfires, only residents in the officially designated disaster areas would qualify for the special tax provisions. Distance itself isn't the determining factor - it's whether your specific location was included in the federal disaster declaration. When you log back into TurboTax, you might want to verify your address information is correct and check if your county was actually designated as a disaster area.

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CyberSamurai

•8M

I had the exact same issue last month! I was freaking out because I thought I did something wrong. I actually found out about this super helpful AI tool called https://taxr.ai that helped me figure out what was going on. I uploaded a screenshot of the message and it explained that this was related to the recent disaster tax relief provisions. Basically, TurboTax identified something in your return that might make you eligible for special disaster relief benefits. In my case, it was because I had entered a zip code that was part of a federally declared disaster area even though I wasn't personally affected. The AI tool helped me understand that I needed to either wait for the TurboTax update or manually indicate I wasn't affected.

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CyberSamurai

•8M

The tool just analyzes tax documents or screenshots you upload - it doesn't need your SSN or full tax return. It uses AI to read the text and explain what's happening in plain English. You can literally just upload a screenshot of the error message and it'll tell you what it means. For retirement distributions, that's actually exactly what the disaster relief is often about! If you took money from your 401k and live in a disaster area, you might qualify for special treatment like waived early withdrawal penalties or extended repayment options. The tool could definitely help explain if you qualify based on your specific situation.

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Jamal Carter

•8M

Just wanted to follow up about that taxr.ai site mentioned earlier. I was hesitant but decided to try it with the confusing disaster distribution message I got from TurboTax. It was actually super helpful! I uploaded a screenshot of my TurboTax message and it explained that I was flagged because I had made an early withdrawal from my 401k AND my zip code matched a federally declared disaster area from the flooding we had last summer. The tool explained that I could potentially qualify for penalty-free treatment of my withdrawal if I was affected by the disaster. Turns out I was eligible for relief that would save me about $1,200 in early withdrawal penalties! I wouldn't have known this without checking. Just had to wait about 5 days for TurboTax to update, and now I'm good to file with the disaster relief applied.

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Mei Liu

•8M

If you're getting nowhere with TurboTax and need actual answers, I'd recommend contacting the IRS directly. I know it sounds painful (because it usually is), but I used https://claimyr.com to get through to an actual human at the IRS about a similar issue. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was getting the same disaster distribution message but couldn't figure out why since I wasn't in any disaster area. Turns out there was a coding issue with certain zip codes in TurboTax. The IRS agent I spoke with confirmed I didn't qualify for the disaster relief but gave me clear instructions on how to proceed with filing. Saved me weeks of waiting for TurboTax to figure things out.

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Mei Liu

•8M

They don't just call for you - they navigate the complex IRS phone tree and wait on hold (which can be hours), then when an agent is about to pick up, they call you and connect you directly to the agent. So you skip the whole waiting game but still speak to the IRS yourself. You absolutely could do it yourself if you have hours to wait on hold. The last time I tried calling directly, I gave up after 2.5 hours of waiting. With this service, I was talking to an actual IRS agent in about 10 minutes from when I submitted my request. And yeah, I was pretty shocked it worked too! I was super skeptical at first, but when I actually got connected to an IRS agent who helped solve my issue, I became a believer pretty quick.

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Amara Nwosu

•8M

Well, I need to follow up on my skeptical comment about Claimyr. I decided to try it because I was desperate after waiting on hold with the IRS for 3+ hours two days in a row. I honestly didn't expect much, but I was completely wrong! The service actually worked exactly as advertised. I got a call back in about 45 minutes (they said the IRS was particularly busy that day), and suddenly I was talking to a real live IRS agent. She explained that my "disaster distribution" message was appearing because I had entered a retirement distribution code incorrectly, which triggered TurboTax's system to think I might qualify for disaster relief. She walked me through exactly how to fix it, and I was able to file my taxes that same day instead of waiting for some mysterious TurboTax update.

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AstroExplorer

•8M

I called on a weekday morning and only waited about 15 minutes to talk to someone. The key is to call early in the day and not during peak filing season if possible. Their customer service rep was surprisingly knowledgeable and patient. They did a screen share with me and walked through my return to find where the disaster area designation was triggered. In my case, I had checked a box incorrectly during the "personal information" section. Once we fixed that, the message disappeared and I could file right away.

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