IRC 1341 Page 3-19 of TheTaxBook

[DB Cooper]

A modest income taxpayer repaid 2004 unemployment benefits in 2005. The question is his tax was zero both years but when I re-run the tax retun his refund jumps because the EIC and the child tax credit jump up with less income.

May I use the difference in refunds and claim that amount as IRC 1341 or do I need to look at line 62 {the tax}.

Thanks in advance.

[Koss]

Form 1040X

I don't know whether IRC 1341 can be used to adjust refundable credits.

Seems like an amended return would be a lot easier, and probably subject to less scrutiny by the IRS.

I understand that you are approaching this as a "repayment of income," but I think if it's an open tax year (within the three year time limit), that the taxpayer has the option of filing an amended return instead of claiming a tax credit under IRC 1341.

Burton M. Koss
koss@usakoss.net

https://www.usakoss.net

[JON]

Minnesota

Seems to me here in tax land if you do not repay in the year you got it ouch, it becomes a misc itemized.... If that helps..

[Bjorn]

Irc 1341

Code Section 1341 does not mention anything but tax so your person does not get any cha ching for his repayment of income previously taxed by giving him any refundables. I hope he has better luck on the state side.