You will need to report on your 2020 tax return what is included in box 1 of your 2020 1099G. There are many instances where overpayments from the Pandemic Unemployment Assistance are being waived by the states. I would recommend including in income what is reported on your 1099G and if you are later deemed to owe those amounts back in a later year, here are your options:
Repayment of $3,000 or less - If the income was reported as wages, unemployment, or other nonbusiness income, no deduction is allowed.
Repayment more than $3,000. The taxpayer can choose to either:
- Claim a deduction. If the amount is another itemized deduction, report the deduction on line 16, Schedule A (Form 1040),or
- Claim a credit. Claim a credit for the amount repaid by calculating the tax from the earlier year without the income that was later repaid. Subtract the recalculated tax from the tax shown on the original return and report on line 13, Schedule 3 (Form 1040).
In the 1099G unemployment benefits input screens in TurboTax, you will be lead through the process of entering any repayments you made in subsequent years.
Click HERE for more information on entering Unemployment Benefits in TurboTax
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