If the social security income you received for your son was included in your taxable income (usually it would not be if you were a representative payee) you could claim a deduction or a credit. If the social security was not reported as income, the repayment would not be a deductible expense and it would not be creditable.
See
IRS Publication 525 for a full explanation by clicking here: Pub
525. The following is the explanation of the credit and deduction from that
publication:
If you had to repay an amount
that you included in your income in an earlier year, you may be able to deduct
the amount repaid from your income for the year in which you repaid it. Or, if
the amount you repaid is more than $3,000, you may be able to take a credit
against your tax for the year in which you repaid it. In most cases, you can
claim a deduction or credit only if the repayment qualifies as an expense or
loss incurred in your trade or business or in a for-profit transaction.
Type of deduction. The type of deduction you are allowed in
the year of repayment depends on the type of income you included in the earlier
year. In most cases, you deduct the repayment on the same form or schedule on
which you previously reported it as income. For example, if you reported it as
self-employment income, deduct it as a business expense on Schedule C or
Schedule C-EZ (Form 1040) or Schedule F (Form 1040). If you reported it as a
capital gain, deduct it as a capital loss as explained in the Instructions for
Schedule D (Form 1040). If you reported it as wages, unemployment compensation,
or other nonbusiness income, deduct it as a miscellaneous itemized deduction on
Schedule A (Form 1040), and see the instructions there.
If you repaid social security or
equivalent railroad retirement benefits, see Pub. 915.
Repayment of $3,000 or less. If the amount you repaid was $3,000 or
less, deduct it from your income in the year you repaid it.
Repayment over $3,000. If the amount you repaid was more than
$3,000, you can deduct the repayment (as explained earlier under
Type of deduction.
). However, you can choose instead to take a tax credit for the year of
repayment if you included the income under a claim of right. This means that at
the time you included the income, it appeared that you had an unrestricted
right to it. If you qualify for this choice, figure your tax under both methods
and compare the results. Use the method (deduction or credit) that results in
less tax.
When determining whether the amount you repaid was
more or less than $3,000, consider the total amount being repaid on the return.
Each instance of repayment is not considered separately.
Method 1. Figure your tax for the year of
repayment claiming a deduction for the repaid amount.
Method 2. Figure your tax for the year of
repayment claiming a credit for the repaid amount. Follow these steps.
- Figure your tax for the year of repayment without
deducting the repaid amount.
- Refigure
your tax from the earlier year without including in income the amount you
repaid in the year of repayment.
- Subtract
the tax in (2) from the tax shown on your return for the earlier year.
This is the credit.
- Subtract
the answer in (3) from the tax for the year of repayment figured without
the deduction (step 1).
If method 1 results in less tax, deduct
the amount repaid. If method 2 results in less tax, claim the credit figured in
(3) above on Form 1040. (If the year of repayment is 2015, and you are taking
the credit, enter the credit on Form 1040, line 73, and see the instructions
there.)
The
simplest method in TurboTax is to claim the deduction. To claim the deduction,
you follow this path in the program:
- Go to the Federal Taxes TAB
in the program.
- Next go to the Deductions and
Credits SubTAB
- Then find the section labeled
Other Deductions and Credits.
- Then click Start or Update on
the line labeled Other Common Deductions.
- Click no on the
Generation-Skipping Tax question, yes to Less Common Expenses.
- On the subsequent screen,
enter “Unemployment Income Repaid” and the amount.
If
you choose the credit method, you will need to make the calculations (as
explained above and in IRS Publication
525) yourself and you would need to switch to the desktop (CD/Download)
version of TurboTax. The entry for the credit is made by doing the following:
- Once you have the CD/Download
version working and the return open, click on forms at the top of the
window or by hitting CTRL+1 (or Command + T for Mac users).
- Open Form 1040 and scroll to
line 72.
- Under line 72 you will find
the “Other Credits and Payments Smart Worksheet”
- Enter the credit on item D.
