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I received a payment from an involuntary bankruptcy case…

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I received a payment...

I received a payment from an involuntary bankruptcy case this year. Social security and medicare were deducted from the payment by the court. How do I declare these deductions on my 1040 form?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I just need to know where on the 1040 form I can claim these deductions as a credit

Accountant's Assistant: Is there anything else important you think the Accountant should know?

Nothing

Submitted: 2 months ago.Category: Tax
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Answered in 19 hours by:
3/31/2018
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 2 months ago
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,057
Experience: 35 years tax experience, including four years at a Big 4 firm.
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Hi from Just Answer. I'mCustomer and can assist.

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Tax Professional: PDtax, Certified Public Accountant (CPA) replied 2 months ago

I suspect your payment was for back wages, as wages unpaid within the last 90 days, i believe, are a superpriority and paid from a bankruptcy estate before almost any other debts.

If you had $1,000 in gross wages due, but had $62. and $14.50 withheld as social security and medicare taxes, your check from the trustee might have been $923.50. You shoudl report that as a wage, for $1,000, from your employer.

You don't get a deduction for the amounts withheld, but reporting this way will give you credit for those withholdings with Social Security.

Thanks for asking at Just Answer. Positive feedback, five stars please, is appreciated. I'mCustomer

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