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Leslegg2
New Member

credit for reimbursing Long term disability company after receiving.a lump sum payment from Social Security

 
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1 Reply
AmyC
Employee Tax Expert

credit for reimbursing Long term disability company after receiving.a lump sum payment from Social Security

If the long term disability was taxed, then you want to recoup that money. If it was not taxed, you have no right to a credit. 

If it was taxable income repaid in the same year the income was received, you can deduct the  repayment.

If it was taxable income in a prior year, it is only deductible if you repaid more than $3,000. It can be taken as a credit or a deduction. For most people, the credit is the better choice.

 

Here are your options and how to do it, see Turbo Tax article What is a Claim of Right Repayment. which covers repayment for one year. If you repaid over multiple years, you will need to do the same for each year.

 

See also Pub 525 for examples of how to figure the credit. You will want to determine which is better for you, the credit or the deduction.

 

 If the credit is best, you will need to download the desktop version and move your .data file so you can pick right up where you left off. 

See also:  How to download TurboTax Desktop software from TurboTax.com

 

If you take the credit, it will show up on Schedule 3.

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