MFJ. 2022 & 2023 Social Security Received, then Withdrawn, then Paid Back in 2024. No SSA-1099!?! Help! :-)

[lopat08865]

MFJ status. In 2022 we filed my 62 yr old spouse for Social Security & received $2,466. In 2023 spouse received $6,258. Spouse received $0 Social Security in 2024 (because we filed Form 521 to withdraw her claim).

On 10/29/2024 we repaid Social Security the full amount of benefits spouse had received: $8,724 ($2,466 for 2022 + $6,258 for 2023).

In 2024 I started collecting under my own Social Security (& we've got a phone appointment scheduled with Social Security to file & begin collecting for my spouse as of January 2025).

I got an SSA-1099 for my 2024 benefits. I *thought* I would get one for my spouse for 2024 showing our repayment. I thought that the difference between my 1099 of $18,034 would be offset by my spouse's repayment of $8,724. But Social Security said my spouse will not be getting a 1099 for 2024, because my spouse hadn't received any SS$ in 2024.

So how do I handle this for taxes in Turbotax? 

[KeshaH]

Before we can determine how to treat the repayment, we'd need to know if any of the Social Security benefits were included in your taxable in 2022 and 2023. Can you check your 2022 and 2023 tax returns to verify if any portion of these benefits were taxed? The taxable portion of benefits would be reported on line 6b. 

If none of your benefits were taxable for 2022 and 2023, there'd be nothing to do since you haven't paid tax on it.

If you did include some of the benefits in your taxable income, you would only be making an adjustment for the amount that was included. Depending on how much the taxable benefits were, you'd either 1) take an itemized deduction on Schedule A for the amount that was repaid or 2) calculate the difference you paid in tax in those years and the tax that you would have paid if you hadn't included those benefits in income - the difference would be a credit on your 2024 tax return (available if the benefits were at least $3,000).

[lopat08865]

2022: $2,096 of $2,466 Social Security benefits were taxable (line 6b)
2023: $5,319 of $6,258 Social Security benefits were taxable (line 6b)

I don't believe Itemizing Deductions for 2024 is to our benefit (no mortgage, no medical >2%).

Sorry, I'm not exactly sure what or how you're saying the alternative works? Can you be more specific? Thanks!

[AmyC]

The laws have a $3000 floor of taxable income repaid to qualify for a credit for the repayment. You can take the IRC 1341, claim of right repayment. 

We have a great article with the instructions you need.  You may end up recalculating your income for those 2 years as if the income had not been there:

• determine the tax difference for each year,
• combine those totals and
• have a tax credit for this year.

Your state may also allow an IRC 1341 credit, some do.

Reference:

What is a claim of right repayment?

[lopat08865]

Thanks for the precise link which I'll explore!

So just confirming: in our specific case it doesn't matter that 2022 was under $3000 repayment.

For our Federal 2024 filing, I'll refigure my excess taxes paid for *both* 2022 & 2023, and, since our 2024 total repayment was >$3000, we can take a deduction for the total of both 2022's & 2023's tax overpayments on 2024's taxes. Correct?

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Put another way, in *our* specific case, it's effectively rephrasing your first sentence to read:

"A Claim of Right Repayment is a deduction you can take in the current tax year if you’re required to pay back income totaling in excess of $3,000 from 2 previous tax years that you thought you could keep.

Sorry for "beating what may be a dead horse," but I just want to make sure I understand 🙂

[RobertB4444]

You seem to understand it perfectly.

@lopat08865