Unemployment compensation

[trberkovich]

Apparently, my son must repay unemployment compensation that was overpaid in 2021.  Since taxes were paid on it in 2021, can a credit be requested when it is repaid?  If yes, does the 2021 return need to be amended or can the credit be applied in the year that the overage is repaid, like 2023?  If on the 2023 return, how do we ask for the credit?

[KarenL4]

Hi, trberkovich,

It sounds like what you are describing is a "claim of right."  This article does a great job of explaining the issue and let's you know that if you are eligible and choose the "refundable credit" option, you will need to use TurboTax desktop to process the tax return (instead of TurboTax online).  The simple method described in the article works with either TurboTax Desktop or TurboTax online.

If you are inclined to look at IRS publications, this link to:

Claim of Right - IRC 1341, Repayment of Income Previously Reported

can give you more information.

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Regards,

Karen