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February 23, 2022
Question

I have a pending claim for unemployment as they are trying to get me to pay back the approximate $5000 but it is a pending situation for the past 2 months. How do I file?

  • February 23, 2022
  • 2 replies
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2 replies

February 23, 2022

If you received the $5,000 unemployment in tax year 2021, you'll have to report it in tax year 2021. If you lose the appeal and have to repay the $5,000 in tax year 2022, you'll be able to claim the $5,000 on your 2022 income tax return as a claim of right repayment. 

 

A Claim of Right Repayment is a deduction you can take in the current tax year if you’re required to pay back income in excess of $3,000 from a previous tax year that you thought you could keep. You reported and paid taxes on the money, not knowing you’d have to pay it back. 

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February 23, 2022

Turbotax answer was incomplete. you have an option in 2022 if that's when you make the repayment and it's more than $3000. you can take as a deduction on Schedule A (usually not the best option) or you recompute your 2021 taxes as if you never got the amount repaid.  that should decrease your taxes. the decrease in taxes can then be taken as a credit on your 2022 return.