Lump Sum SSDI & AOTC

Forum|Forum|2 years ago
January 30, 2024
2 replies
21 views

I have a client that received SSDI lump sum payment in 2022 for TY 2018-2021. All had to be paid back to disability company

This lump sum is keeping them from getting Educational credit ( income limit )

Due to the fact that it is for all prior years and claim refunded to original disability payor is there a way to adjust income to get the credit?

ProSeries Professional

This topic has been closed for replies.

Just-Lisa-Now-

Intuit Community Champion

So when they got the disability payments originally, did those get included as income?

If so, then you should be able to use Claim of Right for the repayment to the disability company since that money was already taxed.

If not, I think they may be out of luck.

You've done the lump sum calculations, allocating the figures to the correct years (theres a smart worksheet for that) and it still makes too much taxable in 2022?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

B

BAR833Author

Level 3

Yes original disability payments were included in income

I did claim the of right and deducted on schedule A but that reduction is not being used in income calculation

Yes broke down the years in the worksheet.

BobKamman

Level 15

It was not paid back until 2023?

B

BAR833Author

Level 3

Paid back in 2022

Just-Lisa-Now-

Intuit Community Champion

Id use Claim of Right and figure the credit, (Sch 3, Line 13) not the Sch A deduction (assuming its over $3000).

Pub 525, Page 37 explains how to figure the credit.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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