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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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socila security states they have over paid me over aperiod

Customer Question

socila security states they have over paid me over aperiod of seven years and requesting me to pay back 65,000.00, which I have filed taxes on that amount. How am I going to be compensated for the taxes paid on the over payment amount.
Submitted: 4 years ago.
Category: Tax
Expert:  Lev replied 4 years ago.

LEV :

Hi and welcome to Just Answer!
If part of your social security benefits was taxable in previous years - and if following years you have to pay that amount back - that is repayment.
If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it.
You will find information about HOW to claim a deduction or a credit for the repayment in IRS publication 525, page 36 - http://www.irs.gov/pub/irs-pdf/p525.pdf
If you are eligible for both - for deduction or for credit- you may choose what is more beneficial - but generally - a credit might be better.

Expert:  Lev replied 4 years ago.
Just in case you were not able to use the chat - I am switching to Q&A mode and porting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

Hi and welcome to Just Answer!
If part of your social security benefits was taxable in previous years - and if following years you have to pay that amount back - that is repayment.
If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it.
You will find information about HOW to claim a deduction or a credit for the repayment in IRS publication 525, page 36 - http://www.irs.gov/pub/irs-pdf/p525.pdf
If you are eligible for both - for deduction or for credit- you may choose what is more beneficial - but generally - a credit might be better.