Repayment of re-enlist bonus

[BHoffman]

Can anyone steer me in the right direction? Client's son received re-enlistment bonus in 2007, but separated early. Not in a combat zone. Repaid the bonus. How is this repayment reported on son's 1040?

[WhiteOleander]

Can anyone steer me in the right direction? Client's son received re-enlistment bonus in 2007, but separated early. Not in a combat zone. Repaid the bonus. How is this repayment reported on son's 1040?

Check page 3-21 of TTB. It gives the instructions. The rules change depending on whether the repayment is less than $3000.00 or more.

[BHoffman]

Thanks so much! That will recover the income tax.

What about the FICA?

[BOB W]

You can take the itemized deduction or the tax credit. The same with the state, if any. Expect IRS/STATE follow up as the credit confuses them. I sent everything they needed but the examiners put those papers to the side. I had to re-explain the credit.The credit is the (usually) best way to go.

[BHoffman]

Thanks. I'm armed with IRC 1341. And have discovered no refund of FICA is allowed.

[WhiteOleander]

Thanks. I'm armed with IRC 1341. And have discovered no refund of FICA is allowed.

Yes,that's what I thought. But, I can't remember where I learned that. But, he will still have credit for the FICA in his SS.