When I enter a "claim of right repayment over 3k" the software also populates an unemployment 1099 under income and expenses. Is this a software bug?

[mmmed]

under income and expenses, an "unemployment and paid family leave 1099-G" is automatically populated when I entered my "claim of right" deduction under the deductions and credits section.  I do believe this must be a software glitch.

[DoninGA]

Yes.  I just tested it on a TurboTax Self-Employed online edition and on a TurboTax Premier desktop edition.  It does enter a negative amount as Unemployment compensation when a Claim of Right amount is entered in the Other Deductible Expenses section.

I will notify one of the TurboTax moderators of this forum concerning this issue.

[lizwiz94]

Yes same thing is happening to me! How do you fix it before submitting your taxes if the bug is not fixed in time. 

[rjs]

@lizwiz94 

Incorrect answer deleted.

[rjs]

@lizwiz94 

Disregard my previous reply. It was wrong, so I have deleted it. I was not reading the screens carefully enough.

There is nothing that you need to fix. The negative amount shown for unemployment on the Income Summary screen is not a problem. It's just a result of a confusing way that the TurboTax interview handles the repayment. The actual tax return is correct. The repayment is entered as an itemized deduction on Schedule A line 16.

However, if you made a claim of right repayment over $3,000 you have a choice of two ways to handle it on your tax return. One way is the itemized deduction on Schedule A line 16, which is what TurboTax does. The other way to handle it is to claim a credit on Schedule 3 line 12d. If you want to do that, or you want to see which way gives you the lower tax, see "Repayments" in IRS Publication 525 for the details. The calculation of the credit is complicated, and TurboTax will not do it for you.

If you want to claim the credit instead of the itemized deduction, it cannot be entered in the TurboTax interview. It can only be entered in forms mode in the CD/Download TurboTax software. That means there is no way to enter it in TurboTax Online, because TurboTax Online does not have forms mode.