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IRC 1341 for 2012

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    IRC 1341 for 2012

    Taxpayer repaid Social Security benefits of $5,000 +/- in 2012 for the tax year 2011. Because the repayment is over $3,000, the 2011 tax can be refigured and "IRC 1341" w/ the amount on line 71 can be credited on 2012 tax return. My questions:

    -Is this a refundable credit?

    -Is there any reason the IRC 1341 credit cannot be done on an amended return for 2012?

    -The only other option is to claim a deduction for the amount repaid, not subject to the 2% AGI limitation, correct?

    I believe it is a refundable credit which would be advantageous to the taxpayer because they went from the 25% tax bracket in 2011 to only the 10% tax bracket in 2012.

    #2
    It is a refundable credit, and the instructions tell you NOT to file an amended return for the year(s) the payments were taxed.
    Don't forget the State if taxes were paid there as well.

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