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Level 15
Level 15

Retirement tax questions

You do not "restate" or amend your 2019 tax return. The adjustment for the repayment will be made in 2020. Your Form SSA-1099 for 2020 will show the amount that you repaid in box 4. That will be subtracted from your total 2020 benefits in box 3, and the resulting net amount will be shown in box 5. So you are compensated for the tax you paid in 2019 by not paying tax on $9,000 of your 2020 Social Security benefits.


If the amount that you repay is more than your total benefits for 2020, box 5 will be a negative amount. On your 2020 tax return you will be able to either claim an itemized deduction for that amount, or a credit that is calculated by recalculating your 2019 tax. You claim either the deduction or the credit, whichever makes your 2020 tax lower. But see correction below. The calculations in this situation are very complicated, and TurboTax will not do all the calculations for you. You can read about it in IRS Publication 915. In the 2019 edition look for "Repayment of benefits" on page 5 and "Repayments More Than Gross Benefits" on page 15.


If your SSA-1099 for 2020 has a positive amount in box 5, you will simply enter that reduced amount in TurboTax for 2020 and the tax adjustment is automatic. If your SSA-1099 for 2020 has a negative amount in box 5, and you need help handling it, post a new question here when you start working on your 2020 tax return.

 

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