Unemployment compensation wants to be repaid. So do I claim it, or what should I do since they want the money back?

[davidjbuffington]

I was paid unemployment. My work lied and said I was fired when I was let go due to slowing work conditions. Unemployment now wants to money back, and have said they will have the IRS deduct it to repay them. So should I claim it, since it seems that will lower my refund, if they are planning on taking back the $1038 anyway?

[SweetieJean]

You must claim what you received in 2016 on your 2016 tax return.

If you repay it in 2017, the repayment will be addressed on your 2017 return (filed in early 2018).