1099-G and Overpayment on Unemployment

[billelliottjr]

Hello!

I am helping a friend with taxes, and I am stumped. I called the IRS for help 3 weeks ago, and the lady said a specialist would call back within 2 weeks, but I never heard back. So I am hoping that someone here can help!

My friend collected unemployment in 2006. Then, in 2007, the state decided that he received it unjustly and he had to repay it. It seems to me I need to report this repayment somewhere since he would have been taxed on it last year. He received a 1099-G, but the "normal" boxes are all at 0 (box 1,4,11). Box 9, which is titled "Amount repaid on overpayment" has $560.00 listed. The lady who I spoke with at the IRS said that the form she was looking at didn't even have a box 9.

Please help, I'm stumped!

By the way - This is a simple one, no itemizing or anything like that.

Thanks,
Bill

[travis bickle]

put it

on line 21 [or wherever it says "other income" on your form] as a negative number and subtract it out.

on the dotted line area of line 21 write "repayment of government benefits".

keep EVERYTHING for a year or two just in case.

[billelliottjr]

1099g

Great, thank you!

Is there still a way to efile it that way, or should I play it safe and use the good old fashioned paper forms?

[billelliottjr]

1099G, Part II

Now I'm really confused... I found a spot in the tax software to enter this, I just clicked on the unemployment compensation box and it asked for previous year's repayments. However, it didn't adjust the income at all. It should, right?

If so, proves my point that these "free" tax apps end up ripping people off a lot of the time!

[Safire]

You offset the 07 unemployment received by the 06 overpayment

[billelliottjr]

1099G, Part II

There wasn't any unemployment collected in 2007, so I don't think that there would be anything to offset, right?

[Jesse]

on line 21 [or wherever it says "other income" on your form] as a negative number and subtract it out.

on the dotted line area of line 21 write "repayment of government benefits".

keep EVERYTHING for a year or two just in case.

See TTB page 3-31 fr income received in an earlier year and repaid in 2007. Depends on whether the amount is < or > $3,000.

[Jesse]

Now I'm really confused... I found a spot in the tax software to enter this, I just clicked on the unemployment compensation box and it asked for previous year's repayments. However, it didn't adjust the income at all. It should, right?

If so, proves my point that these "free" tax apps end up ripping people off a lot of the time!

You need to order TTB or read IRS publication 525, it's not that simple!

[Bees Knees]

on line 21 [or wherever it says "other income" on your form] as a negative number and subtract it out.

on the dotted line area of line 21 write "repayment of government benefits".

keep EVERYTHING for a year or two just in case.

Sorry, but this is incorrect. Repayment of income from a previous year is not deductible as a negative on line 21.

Jesse has provided the correct answer to this problem.

[billelliottjr]

1099G, Part II

Great, thanks all! I will check it out.

[DonPriebe]

So far the software is correct!

Now I'm really confused... I found a spot in the tax software to enter this, I just clicked on the unemployment compensation box and it asked for previous year's repayments. However, it didn't adjust the income at all. It should, right?

If the repayment was under $3,000 it appears on Schedule A as a miscellaneous deduction. If it's over $3,000 you can optionally do a "Claim of Right" calculation and get a credit.

In either case, the income (AGI) doesn't change.

[oceanlovin'ea]

Sch A Miscellaneous deduction

I had a client this year that had a repayment so I had to research this issue. Repayment is a miscellaneous deduction subject to 2% on the schedule A.

So if the taxpayer doesn't itemize deduction he will get no credit for overpayment.

Linda F