Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
pattisun2016
New Member

Ssa 1099 for children

I HAD TO REPAY $23K TO SOCIAL SECURITY FOR MY SON'S SSDI EARNINGS I RECEIVED FOR HIM AS A MINOR. (NO GOOD REASON, SSA IS REALLY SCREWED UP)!!
   DO I REPORT THIS ON MY TAXES ANYWHERE? I HAD TO REPORT IT AS INCOME WHEN I WAS RECEIVING IT.
1 Best answer

Accepted Solutions
Phillip1
New Member

Ssa 1099 for children

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.

  1. Figure your tax for the year of repayment without deducting the repaid amount.
  2. Refigure your tax from the earlier year without including in income the amount you repaid in the year of repayment.
  3. Subtract the tax in (2) from the tax shown on your return for the earlier year. This is the credit.
  4. 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: 

  1. Go to the Federal Taxes TAB in the program.
  2. Next go to the Deductions and Credits SubTAB
  3. Then find the section labeled Other Deductions and Credits.
  4. Then click Start or Update on the line labeled Other Common Deductions.
  5. Click no on the Generation-Skipping Tax question, yes to Less Common Expenses.
  6. 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: 

  1. 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).
  2. Open Form 1040 and scroll to line 72.
  3. Under line 72 you will find the “Other Credits and Payments Smart Worksheet”
  4. Enter the credit on item D.

View solution in original post

1 Reply
Phillip1
New Member

Ssa 1099 for children

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.

  1. Figure your tax for the year of repayment without deducting the repaid amount.
  2. Refigure your tax from the earlier year without including in income the amount you repaid in the year of repayment.
  3. Subtract the tax in (2) from the tax shown on your return for the earlier year. This is the credit.
  4. 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: 

  1. Go to the Federal Taxes TAB in the program.
  2. Next go to the Deductions and Credits SubTAB
  3. Then find the section labeled Other Deductions and Credits.
  4. Then click Start or Update on the line labeled Other Common Deductions.
  5. Click no on the Generation-Skipping Tax question, yes to Less Common Expenses.
  6. 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: 

  1. 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).
  2. Open Form 1040 and scroll to line 72.
  3. Under line 72 you will find the “Other Credits and Payments Smart Worksheet”
  4. Enter the credit on item D.

View solution in original post

Dynamic AdsDynamic Ads
Privacy Settings
v