If you received Special Separation Bonus (SSB) and the later qualify for retired or retainer pay, you would have been required to repay the full gross SSB paid to that date.
When they recoup SSB payments, they treat it like a pre-tax deduction. That is, they would have reduced your taxable income by the amount they deducted for the recoupment each month.
Because they recoup the gross amount you would have claimed a repayment of the amount when you filed your taxes for each year.
It is too late to go all the way back to 19996 and do this but for any year that you repay a taxable amount for a previous year, you can claim that as a reduction for the current year that the payment was made. It is generally taken on Schedule A but you could have claimed a credit in the year of repayment on your federal return.
This is done by recalculating tax for the year you received the income, but don’t include the income you repaid. The difference in tax – with and without the repaid income – is the amount of your credit. Report this credit on the “total payments” line of your federal return (for the year of repayment) with the reference “I.R.C. 1341.”
Like I advised, you cannot go back and amend your returns all the way to 1996 but you could go back 3 years and amend and then for 2015 show the amount you repaid in 2015.
If you wish to speak to them about your balance you can call
M-F, 8 a.m. to 5 p.m. ET
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