unemployment from 2 states

[BP.]

Client worked in both his resident state -PA, and adjoining non-resident state -NJ.

He collected unemployment benefits from PA. Later, it was determined that NJ should have paid some of the benefits. Rather than collect repayment from client, PA received reimbursment from NJ.

Now client has UC1099-G from both states: from PA for the amount he did actually receive & from NJ for the reimbursement to PA. Doubtful that either state will correct the 1099, if they even need to. But meanwhile client has received 1099's that overstate his benefit income. Short of attaching a note to the tax return- anyone have any experience/suggestions on this?

[Nashville]

Repayment

I believe at one point the IRS instructions to the 1040 directed to pencil in "repayment" of dollars on the same line item as the unemployment income. Software packages allowed for an amount to be entered as a repayment.

Whereas nothing techinically was "repaid", I would enter the dollar amount of the duplication in the "repayment" field if I knew the amount. This is the most expedient way to get to where the income is properly presented.

[taxea]

I would back up the adjustment with documentation from one or the other of the paying agencies that details what happened and keep it in the client's file in case there is any question by IRS in the future.