@maoakden wrote:
Died Dec 17th. Payment recd for $3303 on Dec 20th. That payment was clawed back in January, BUT the 1099-R still reflects 12 monthly payments of $3303.
- Here is my question again:
- 1. I'm supposed to file her 2023 taxes with the higher amount and a larger tax burden? Then wait to file 2024 taxes for a refund which won't happen, because I'm not allowed to file 2024 taxes for a person who died in 2023
- 2. OR is there a way to deduct the clawback?
You file the 2023 return based on the income that was actually paid in 2023, regardless of the clawback. You can't deduct the repayment.
Exception: if you can get the pension payor to issue a revised (corrected) 1099-R, then you could report the lower income. But they are not required to do this.
Assuming the pension plan does not issue a revised 1099-R and you (*she) pays tax on the full amount, you can then file a 2024 tax return to claim a refundable credit, even if there is no other income or tax owed. (Generally, she would not have 2024 income. If her estate has ongoing income in 2024, then the estate needs its own tax number and there is a lot of other stuff you need to do differently.). This is called an IRC 1341 Claim of Right credit. You figure out the amount of tax shew would have saved in 2023 if she could have reported the lower amount, and that is claimed as a credit on the 2024 return. If she has no other income for 2024 and owes no tax, the IRC 1341 credit amount will generate a refund in the amount of the credit.
See this for more.
https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/claim-right-repayment/L0aW5v3Tp...
