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Unemployment Screw up on 1099




I have a client who was had to pay back some funds to the Unemployment commission after they received a few checks once the found a new job. But the 1099 shows all fund paid to my client versus backing out the amount repaid by y client. My client's check was paid to the Unemployment Commission reimbursing them the money paid and taxes due on that money. They refuse to issue an amended 1099. Any tips on how to account for this since my entering the full amount paid to my client would result in too much tax being paid.

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When did he repay the money? Why do they refuse to issue an amended 1099?

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If the benefits were paid and repaid in the same year, just reduce the amount reported on the 1099-G by the amount repaid. "Repaid" should be in the left margin.

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1099 was for 2008, but check my client paid was in 2009. Unfortunately she had no unemployment compensation in 2009 to net this amount against. So what do you you recommend now?

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She will have a Sch A deduction in 2009 if it was less than $3,000; for amounts greater Sec 1341 comes into play.

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It's $5,200 so we need to do the 1341. Any idea where that should be claimed. I googled it and it says line 70 on 1040 but I think that may be old, since the recovery rebate is on 70.

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That is one way of doing it; the other is to take the deduction in the year of the repayment. You choose the best way.

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Page 36: http://www.irs.gov/pub/irs-pdf/p525.pdf