SS re-paid in same year

[Possi]

My new client has a plethora of issues. One of many is that he signed up for SS, and right away his CFP told him to "stop it, stop it right now."  The total paid/paid back was $3536.00.

So, I have the records that he received January, then cancelled and paid it back, then received February and paid that back, too...  all in 2016, the tax year where I am responding also to a booming Sch D that was totally left off the tax return. Yes, yes... DIYer. 

I can only find articles and IRS pages on repayments in a following year. What about SAME year?

I have seen other returns come to my office where the re-paid SS was entered as an adjustment on line 21. Would that come back to me? 

  

[Lynn EA USTCP in Louisiana]

Ask to see the 2016 SSA-1099 which should show benefits paid in Box 3 $3,536.00, repayments in Box 4 ($3,536.00) and net benefits in Box 5 -0-.   

[Possi]

2 minutes ago, Lynn EA USTCP in Louisiana said:

Ask to see the 2016 SSA-1099 which should show benefits paid in Box 3 $3,536.00, repayments in Box 4 ($3,536.00) and net benefits in Box 5 -0-.   

The SSA-1099 does not reflect the repayments. I do have proof and documentation from SSA that he received in the mail, so I can prove it was paid if I have to prove it at any point.

[Lynn EA USTCP in Louisiana]

Perhaps there's a corrected 1099-SSA floating around somewhere.  If the only two payments received were the January and February, and these were both repaid in the same year, then SSA-1099 should have reflected that.  Taxpayer may need to go to SSA office and talk with them about this, providing proof of his repayments.

 

[BulldogTom]

Possi,

Please let me know how you handle this.   I have a client that signed up for early SS, but changed their mind and paid it back this year.   Same situation that you have.   I don't know what the 1099SSA is going to say this year, but if I end up with the same situation, I would like to know how you fix yours.

Thanks

Tom
Modesto, CA

[Terry D EA]

Maybe check and see if your client has a my social security account. If he does, then you should be able access all the 1099SSA forms from his account. If he doesn't have an account, I would have him create one. Could save some time and aggravation.

[Possi]

15 hours ago, Terry D said:

Maybe check and see if your client has a my social security account. If he does, then you should be able access all the 1099SSA forms from his account. If he doesn't have an account, I would have him create one. Could save some time and aggravation.

Unless he is right here in my office, and I'm setting it up, he won't have it. Not computer savvy at all, but I will ask.  

I doubt the corrected SSA 1099 is out there because the letter we are responding to has SS income listed that was not on his original return. 

Bulldog, I'll let you know how I deal with it. I have to recreate the wrong return and then fix it. Meanwhile, I'm dealing with another letter for another client. UGH I do hate August/Sept taxes. 

[DANRVAN]

The amount paid back is not taxable regardless of what SSA reports.

Code Sec. 86(d)(2)(A).

Edited August 13, 2018 by jklcpa
changed link to a non-subscribed service not requiring logging in

[Possi]

On 8/13/2018 at 4:20 PM, DANRVAN said:

The amount paid back is not taxable regardless of what SSA reports.

Code Sec. 86(d)(2)(A).

Thanks for the link. 

@BulldogTom,  Since it was included as income on the IRS letter, and the SSA 1099 also stated it as payment with no repayments reported, I entered it on L20. Then I excluded the taxable portion as a negative on L21 with a detail statement. Since we are responding to a Letter, I will include the SSA statements that were sent as receipts to the client, as proof of repayment. 

 

[SaraEA]

On 8/11/2018 at 1:31 PM, Possi said:

doubt the corrected SSA 1099 is out there because the letter we are responding to has SS income listed that was not on his original return. 

Something weird is going on here.  The client paid back SS early in the year, which should certainly be on the 1099.  Now the IRS is listing a different amount altogether?  Wonder if this person had his identity stolen and someone else got the benefits?  Or the repayment was credited to someone else?  I would recommend that the client go to the local SSA office, receipts in hand, and get an explanation.

[Possi]

15 hours ago, SaraEA said:

Something weird is going on here.  The client paid back SS early in the year, which should certainly be on the 1099.  Now the IRS is listing a different amount altogether?  

No, the corrected amount is on the 1099, just not the repayment. 

[Lynn EA USTCP in Louisiana]

The SSA should have shown the repayment amount; there's a box for that and they failed to properly report the repayments. I agree the client needs to go in person to the SSA office with all repayment documentation to get the SSA1099 corrected and reissued.  Or is the net amount in box 5 correct?