Disabled taxpayer has SSA-1099 showing no benefits received and an amount repaid shown as a negative number. Not clear at this point whether they will be able to itemize for that year. Other than as a Sch A Misc (subject or not subject to the 2% haircut?) is there any other option for recovery of this amount? What the individual says is that they received and paid back in the same year and they knew all along what was happening. SSI just loaned them some money until their Federal Employee Disability kicked in starting with a sum to repay to SSI.
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repayments of taxable Social Security benefits
If the benefits that were repaid were taxable Social Security benefits (per the worksheet, and remember that "SSI" as mentioned in your posting isn't taxable in any event), then the repayment can be a Schedule A deduction indeed subject to the 2% AGI haircut. If the amount (which amount??? I'm not sure) is $3000 or more, then any prior year to which the repayment applies can be recalculated a la "claim of right" and the excess tax that was paid in the prior year can be claimed as a credit on this year's return. This is all spelled out in Publ. 17 and also in Publ 915.
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