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Level 1

Social Security Withdraw

I applied for Social Security Benefits in 2020 and received 3 payments.  Then I submitted a withdraw request and paid social security back.  How do I show this in TurboTax so I don't end up paying taxes on money I paid back?

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Accepted Solutions
Level 3

Social Security Withdraw

wait for the SSA-1099 from Social security.

if it was in the same year as the payment there should be no issue the SSA-1999 should reflect the net

if in a subsequent year and the amount repaid was $3,000 or less then under current tax laws you do not get a deduction or credit. in effect, you're taxed as if it was never paid back.

if over $3,000 then. claim a credit for the amount repaid computed as follows

recompute your tax for the year received as if it had not been received. the difference in taxes (original vs recomputed)  is the credit to claim in year of repayment.  it goes on schedule 3 line 12d and indicate as "IRC 1341".

 

View solution in original post

2 Replies
Level 3

Social Security Withdraw

wait for the SSA-1099 from Social security.

if it was in the same year as the payment there should be no issue the SSA-1999 should reflect the net

if in a subsequent year and the amount repaid was $3,000 or less then under current tax laws you do not get a deduction or credit. in effect, you're taxed as if it was never paid back.

if over $3,000 then. claim a credit for the amount repaid computed as follows

recompute your tax for the year received as if it had not been received. the difference in taxes (original vs recomputed)  is the credit to claim in year of repayment.  it goes on schedule 3 line 12d and indicate as "IRC 1341".

 

View solution in original post

Level 1

Social Security Withdraw

Super Helpful.  I paid it back in the same year (mailed the check in October), but the check didn't clear my account until yesterday so it is possible the SSA-1099 will not reflect the net ($0).  Either way, now I know how to deal with.  Thanks!!

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