SOCIAL SECURITY WITHDRAW

[heneson]

I was hoping to clear up my confusion as to which tax year SSA withdraw funds can be deducted when you pay back benefits to SSA in 2020 for benefits received  in 2020 and 2019 but SSA did not present the check to collect funds until Jan 8, 2021 and the bank does not deduct the funds from my checking account until the end of January.  Then I receive my 1099 SSA form a few days later and it inky incudes the benefits that I paid in 2020.

My question boils down to this summary:

Can I apply the entire amount SSA benefits received in 2019 ($5,026) and 2020 ($11,648) that were paid back to SSA via a  check sent to SSA in November 2020 for inclusion in my 2020 tax filing?  If yes, is there a specific SSA form required?  If not, will my 2019 SSA benefits received be reportable in my 2022 tax filing or a 2019 correction filing?

Here are the details.

I understand that anyone who changes their mind within 12 months of first receiving Social Security retirement benefits can withdraw their application for benefits. But they must repay any benefits they have received, as well as any family benefits received on their earnings record.  This is a once-in-a-lifetime option.

I began receiving SOCIAL SECURITY benefits September, 2019 at the age 0f 65.  Total benefits received in 2019 came to $5,026.  I submitted the SSA form 521, withdrawal of SSA benefits, prior to my 66th birthday in August, 2020.  I received a letter approving my withdrawal of benefits request in late October of 2020.  The last SSA benefits check I received was in August, 2020 that brought my SSA payment total for 2020 to $11,648. IRS requested that I send them a check for $16,674 which I did.  (Total of all benefits received in 2019 and 2020.)

IRS received the check via UPS Overnight on November 17, 2020.  My bank did not receive this check from IRS until January 8, 2021 and it was deposited into my account on January 27,2021.

On January 29, 2011, I received my 2020 1099R from IRS indicating that I had received $11,648 in SSA benefits during tax year 2020.

It is my understanding that a donation mailed to a recognized charity that is postmarked prior to the end of the tax year, can be taken as an itemized deduction donation for year it was postmarked in.  In this case tax year 2020 even though check was not presented to my bank by IRS until January 2021?

It is my understanding that a donation mailed to a recognized charity that is postmarked prior to the end of the tax year, can be taken as an itemized deduction donation for year it was postmarked in.  In this case tax year 2020 even though check was not presented to my bank by IRS until January 2021.

Can I apply the entire amount SSA benefits received in 2019 and 2020 that were paid back to SSA, on my 2020 taxes?  If yes, is there a specific SSA form required?  If not, will my 2019 SSA benefits received ($5,026) be deductable on my 2022 tax forms?

[ThomasM125 · Accepted solution]

Form what you said, my understanding is that you received a request to pay back the benefits in 2020 and you did so in 2020. So, the fact that the IRS cashed the check in 2021 would not affect the treatment of the repayment belonging to 2020. So, you should treat the repayment as belonging in 2020.

The repayment amounts need to be applied to the years in which the original benefits were paid. For 2020, you would not report any social security benefits on your tax return if you repaid all of the benefits you received. You should request that the social security administration correct your SSA-1099 form to reflect the repayment in 2020. If they will not do so, you should mail in your tax return and attach an explanation as to why you are not including the social security income on it.

You will have to recalculate the income tax in prior years and enter a credit on your 2020 tax return to get credit for taxes paid on the benefits in prior years. Here is something from IRS publication 915 on how to do that: