Repayment of Social Security

[genius]

Joint return. Husband and wife both get taxable social security. 85% of total is taxed every year. Husband repays more social security in 2022 for old years than he receives, negative Box 5 (More than combined TP and Spouse received). Not interested in Credit. Repaid is $16,000. I am going to deduct box 4, repaid amount of SSA-1099 on Schedule A. Or do I deduct 85% on Line 16 of Schedule A? Do I need to report Box 3 (current year benefits) of SSA-1099 as his SS received for the year on page 1? 

Thank you

[qbteachmt]

https://www.irs.gov/publications/p915

"What is covered in this publication.

This publication covers the following topics"

"...Deductions related to your benefits, including a deduction or credit you can claim if your repayments are more than your gross benefits."

[genius]

I have read pub 915. That is how I know all about credit vs deduction and where to take the deduction.

My 2 questions are NOT in pub 915, which is why I posted. 

1. Put Box 3 on Page 1?

2. Deduct 100% or 85%?

[dkh]

If you complete the Smart Worksheet at the bottom of the Social Security Benefits Worksheet ,where it gives you the ability to enter information from all boxes on 1099SA , where do the numbers flow to ?  

[genius]

I appreciate the try. Absolutely Nothing happens. It nets them out as zero and brings nothing to page 1 of 1040 and brings nothing to schedule A. 

[dkh]

Nothing happens is disappointing to hear.

Can this client itemize?  wondering if the 100% or 85% will make a difference

[genius]

huge itemized yes. 85 or 100% would make a difference. And does the Box 3 go on page 1?

[dkh]

My interpretation of P915 -

no box 3 does not go on page 1 

100% is the deduction not 85%

[BobKamman]

You can't net husband's deficit against wife's income. 

The repayment was only $16,000?  I seldom see a client with annual benefits less than that (with the exception of retired government employees who didn't pay into Social Security).  How big a negative number is Box 5?

[genius]

You are correct. He was a known Public Employee with a very large pension and wife has small SS. He and wife each get about 8k a year SS and he repaid 16k+

I'm not looking to Net. I want to deduct the repayment, Box 4 on A. Someone on this chat said only deduct the taxable amount, ie. 85%. I also feel like I would need to report Box 3, this years amount received on page 1. Can't find these answers in the pub.

[BobKamman]

So it turns out Pub 915 says you can net his negative against her positive.  And that still leaves you with a negative?  If it's under $3,000 you're out of luck.  If more, you can claim it on Schedule A, Line 16, or go through the computations for the Section 1341 credit.  

But it's the net Box 5 amount that you deduct.  Not Box 4.  

[dd4vols]

Fire the client........life is toooo short for such big problems!😀😀

[rbynaker]

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@BobKamman wrote:

So it turns out Pub 915 says you can net his negative against her positive.  And that still leaves you with a negative?  If it's under $3,000 you're out of luck.  If more, you can claim it on Schedule A, Line 16, or go through the computations for the Section 1341 credit.  

But it's the net Box 5 amount that you deduct.  Not Box 4.  

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I think Bob gets the Solve on this one.

If they each get $8K and he repays $16K it sounds like that nets out to $0 (or within $3K of it).  No income and no deduction in the TCJA era.

Pub 915 (2022) page 15 bottom of column 1 into column 2:

Repayment of benefits received in an earlier year. If
the total amount shown in box 5 of all of your Forms
SSA-1099 and RRB-1099 is a negative figure, you may be
able to deduct part of this negative figure that represents
benefits you included in gross income in an earlier year, if
the figure is more than $3,000.

This language aligns with IRC 1341 which requires the repayment amount to be "included in gross income for a prior taxable year."  In this case only 85% of the prior SSA benefits were "included in gross income" under IRC 86.

[dkh]

Pub525 page 37 - Repayments    can be reported as Other Itemized Deduction on Sched A Line 16  

[dbtaxsolutions]

I am following this thread, but entering it on line 16 Sch A worksheet does not populate anywhere. 

It's not letting me claime neither Itemized nor credit? how does it work in proseries?

I have a $5380 repaymentin 2022 that was taxed $1601 in 2021.

Any tips on how this works in proseries basic? Thanks