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Level 1

Can I take that off income I received in a lump sum payment for Disability on ssa1099 I had to pay back my employer a large amount for long term disability over payment?

 
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Level 1

Can I take that off income I received in a lump sum payment for Disability on ssa1099 I had to pay back my employer a large amount for long term disability over payment?

With a lump sum distribution from Social Security, you have a choice to spread the payment over several years. TurboTax will guide you through that calculation to see if it will save you some tax.

What you must do with repayment of long term disability depends upon how much was repaid. See the answer below for your options.

https://ttlc.intuit.com/replies/4486007


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Level 1

Can I take that off income I received in a lump sum payment for Disability on ssa1099 I had to pay back my employer a large amount for long term disability over payment?

With a lump sum distribution from Social Security, you have a choice to spread the payment over several years. TurboTax will guide you through that calculation to see if it will save you some tax.

What you must do with repayment of long term disability depends upon how much was repaid. See the answer below for your options.

https://ttlc.intuit.com/replies/4486007


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Level 3

Can I take that off income I received in a lump sum payment for Disability on ssa1099 I had to pay back my employer a large amount for long term disability over payment?

@MiriamF 

The answer you've referenced is no longer available.  I am going to have this issue for 2018 through May 2019, where I will be paying my employer's long term disability company back over 40K that had already been taxed.  Please provide some guidance on what to do so that I don't get taxed on the same 40k again.  Thanks

Level 20

Can I take that off income I received in a lump sum payment for Disability on ssa1099 I had to pay back my employer a large amount for long term disability over payment?

Will you still be receiving LTD in 2019?  If so, the W-2 that your receive from the LTD company for 2019 should show the net result after the payback.  If not, post back here at that time and we will tell you how to handle this.

Level 20

Can I take that off income I received in a lump sum payment for Disability on ssa1099 I had to pay back my employer a large amount for long term disability over payment?

Yes.

 

Repayments.   This situation is  described in IRS Publication 525. pgs 34-35.  If the amount is more than $3000, you can take a  itemized deduction, on line 16  of schedule A or  you can take a credit. The credit is computed by refiguring the tax return from the previous year as if the income had not been received. Then the difference in tax is claimed as a credit on the current year's return.  In the forms mode (the forms mode is not available in the on-line versions of TurboTax[TT]), you can use the line 74 smart work sheet to enter the credit amount on line 74; select item D, claim of right under IRC 1341 for repayments. TT will  enter "I.R.C.1341" on the line next to box d on line 74 of form 1040 (schedule 5). TT does not do the credit calculation or compare it to the alternate deduction.

 

So, the taxpayer  has the option of either claiming the credit or deducting the repayment as a miscellaneous itemized deduction, whichever provides the greater benefit. But, you cannot file an amended prior year return.

 

If the amount is $3,000 or less, no deduction or credit is allowed. In the past, a miscellaneous itemized deduction, subject to the 2% of AGI threshold, was allowed.  But, all miscellaneous itemized deduction, subject to the 2% of AGI rule go away in 2018. I've seen nothing yet to indicate if there will be an exception for repayments of income