I was overpaid by Washington State Unemployment and we had to pay this amount back. This year they refunded this. Do we have to report this on this year's taxes?

[SharonD007]

We'd love to help you but need more information.  When you say "this year" is it 2023 or 2024? Did you get a 1099-G form for the money they refunded to you?  Please clarify.

[willjames624]

We did not receive a 1099 G at all for 2023, when we received this pandemic waiver.  In 2021, my husband was overpaid by Washington State Unemployment.  We paid the money back in 2022.  In Dec 2023, they refunded this amount.  I had to pare down my original post because of the limit on characters.  Thank you for your help.

[DianeW777]

It depends. Since you received it and paid tax on it in the year received, repayment occurred in 2022 and it's not clear if you repaid enough for it to reduce your income in 2022 (more than $3,000).  

Unemployment is taxable for federal purposes which is the only indicator that it should be included.  There was a federal deduction of unemployment benefits in 2020, however it was only for that year. This leads me to believe it is taxable only if you were able to take a deduction in 2022 when it was repaid.  If you did not reduce your income for the repayment in 2022, then you would not be required to report it now.

Washington Pandemic Waiver Program:

You may have received an overpayment of unemployment benefits during the pandemic — between Feb. 2, 2020, to Sept. 4, 2021 — but don’t worry. We’re here to help! We want to waive overpayments for people who qualify. And, if you’ve already paid us back, and we waive your overpayment, you’ll likely get a refund!

We’ll review your case soon, but you can help by providing us with more information. If you do not, we’ll still check if you are eligible for a waiver based on available information. After we review your case, we will send you our decision.

@willjames624 

[willjames624]

Thank you so much for your help!