I received approx. $6000 in SS benefits in 2015. I repaid that amt on 12/19/2015 but the certified check was not cashed until 2/12/2016. How do I handle?

[snowbird3]

My 2015 SSA-1099 did not show this repayment and I had to pay taxes on my benefits.  Can I report this repayment on my 2016 return as negative income under “Other Reportable Income”?

[TomYoung · Accepted solution]

In my personal experience the SSA makes absolutely NO ATTEMPT to work through repayments in any sort of timely fashion.  It's the bureaucratic mindset at its finest: "ain't my money; I'll get to it when I get to it."

What governs here, really, is when that certified check was created and when you mailed it off to the SSA.  (In the case of a certified check the money was drawn from your account as soon as the bank handed you that certified check.)   If the SSA didn't actually process the repayment the correct course of action should have been to report the repayment in 2015 irrespective of what was erroneously reported on the SSA-1099.  That would have resulted in no taxation of your SS benefits.

So my first suggestion is to amend your 2015 income tax return explaining the "timing" difference and claiming a refund.  Then when you get your 2016 SSA-1099 with a negative amount in Box 5 you simply don't enter that SSA-1099 - because it's all been handled in 2015. 

If you're wedded to the notion that you must slavishly follow little pieces of paper generated by an indifferent bureaucracy then you'll need to follow the process under "claim of rights", either taking a "Miscellaneous Itemized Deduction, (subject to the 2% of AGI limitiation), for the $6,000 or you'll claim a tax credit for the amount you overpaid in 2015.

The claim of rights process - specifically addressing a negative amount in Box 5 of the SSA-1099 - is explained here:

https://www.irs.gov/publications/p17/ch11.html#en_US_2016_publink1000171937

I believe if you want to take the credit you'll actually have to resort to "Forms Mode" - which may not be available in the online product - in order to enter the credit on line 71 of the Form 1040 and make the notation "IRC 1341" in the margin next to that line, and then paper file your income tax return.

Tom Young

[fishnazi]

It is true what he says about the SS administration; they drag their feet in addressing any problem you may have.  My wife put in a request to withdraw her claim for benefits in April of 2019, repaid all the benefits paid up to May when they told her it would take 60 days to process the request.  Checks continued through August.  Even though she'd paid back half the benefits , the 1099 SSA showed no benefits repaid for 2019.