Making Work pay credit

[JoeW]

I have a retired policeman receiving a government pension, he is working another job after retirement, made around 25000 wages along with pension, no SS under 62. Filed MFJ and was eligible for a 800 credit. After return was filed the IRS increased his refund by 250. I am assuming he need to repay this 250.

I have another couple, he is a retired State of MO employees and receiving SS. His wife is a retired federal worker. He received the advanced 250 but his wife did not. His original return had them receiving an additional 250 credit. The IRS increased the credit by 250.
Again I am assuming he need to repay.

What is the proper way to send back the increase credit?

[Edsel]

Schedule M

Joe, just out of curiosity, did you file a Schedule M with these clients, or just leave it up to IRS to deal with it? If you did, the Schedule M would properly outline the fact that $250 was received from a government payer.

Not all governments or govt agencies fall into the category of disqualifying the $250. Based on what you've said, I believe the IRS has overpaid your clients.

To answer your specific question, I would encourage your clients to repay the $250 with a personal check and a cover letter. The cover letter should be very specific as to who the money came from that resulted in the $250 decrement.;

[JoeW]

Schedule M was prepared and returns were E-filed.