SSA Payback

[ILLMAS]

TP received a notice from SSA informing them that because of their earnings for 2019 and 2020 they needed to repay back the full amount they received, TP didn't receive much, but can the returns be amended without a correct SSA-1099? 

[jklcpa]

I thought that was usually withheld from future monthly SSA payments until fully repaid, so in other words, it is automatically handled prospectively by SSA and the future reduced net SSA amount would be reported in for that tax year.

[ILLMAS]

Interesting, TP did mention they were making monthly payments out of their pocket, so their monthly SSA is not affected at all, but you are right, I have seen SSA-1099 that are adjusted.

[Lee B]

If the taxpayer is earning too much to receive any benefits, then they have to to repay the overpayment in 30 days or set up a repayment plan.

[ILLMAS]

Found this:
 

Repayment of benefits.

 

Any repayment of benefits you made during 2021 must be subtracted from the gross benefits you received in 2021. It doesn’t matter whether the repayment was for a benefit you received in 2021 or in an earlier year. If you repaid more than the gross benefits you received in 2021, see Repayments More Than Gross Benefits, later.

Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Your repayments are shown in box 4. The amount in box 5 shows your net benefits for 2021 (box 3 minus box 4). Use the amount in box 5 to figure whether any of your benefits are taxable.

Example.

 

In 2020, you received $3,000 in social security benefits, and in 2021 you received $2,700. In March 2021, the SSA notified you that you should have received only $2,500 in benefits in 2020. During 2021, you repaid $500 to the SSA. The Form SSA-1099 you received for 2021 shows $2,700 in box 3 (gross amount) and $500 in box 4 (repayment). The amount in box 5 shows your net benefits of $2,200 ($2,700 minus $500).