I have some follow-up questions now that I am near year end. I am currently paying back the overpayment in monthly installments. I have only paid back a small amount at this point. I am still not clear how 2013 taxes will be handled. Fed and State taxes were taken out but the overpayment balance shows total without taxes removed.
You will get a statement in January, a 1099-G. It should show the full amount of withholding but not the "income" that you are repaying. Wait for that statement. If it does not show things the way that you think is correct, THEN come back here for advice.
Yes. 10char
I received UI money less taxes (State & Fed). I am being told I have to repay the entire amount (not what I received less taxes). This UI money (I don't have any other UI money) that I have to repay will be counted as income for 2013?
I think you are correct but it appears some of the comments above are contradictory.
It's NOT income if he has to repay it. Once he agreed to repay it ceased to be. He should not declare the amounts to be repaid as income, but he does count any previous withholding from the checks he got as payments (since they were paid to the government and he's reimbursing the UI dept for them).
You asked if you would receive a 1099-G if the money is repaid. The answer is YES. That does NOT mean the money is taxable. Its not a difficult concept.
