Social Security Questions? Ask a Social Security Expert
Hello and thank you for your tax question today.
When you pay SSA back for benefits you received and were taxed on, you may take a deduction against other income in the year of the payback.
If you pay the money back in 2016, you will show this repayment next year when you file the 2016 return.
There are two basic ways to put this on your return, depending on the final amount that is repaid. One way is to reduce your taxable income by the amount of the repayment, subject to a "floor" amount; the other is to get a credit for the actual taxes paid in the past. Your tax advisor (or your new tax advisor!) should know how this works.
One way or another, you will only pay the tax on the benefits you actually get paid and keep.
I hope this clarifies the issue. If you need further assistance, please feel free to ask me. Otherwise, please take a moment to rate my answer as it is how the experts are compensated for assisting you today.
Have a great week!