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Unemployment overpayment

Level 3

Client received unemployment in 2020 ( $10,569) . Client received a notice from her state ( April 2021)  that there was an overpayment and that she has to repay  $600. Return for 2020 has not been filed yet. Client intends to repay the $600. Client has not received any unemployment in 2021, is back to work and will not have any unemployment in 2021.  Do I file the return and reduce the amount by $600 and add a statement to the return or  is there another option I can take? 



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3 Replies 3
Level 15

Look up "Repayment under Claim of Right"

Level 3

Thank you I did look up claim of right as you suggested. 

Sounds like I can't do anything for the 2020 returns since she will repay the $600 in 2021 and because it is less than $3,000 she will gain no benefit for the monies paid back 


Level 14

Did she even have enough other income to pay tax?  Or is she in a 17% federal and state bracket so this is a $64 question that concerns $369?  I would tell her I'm doing her a favor and forgetting she even asked so I don't have to bill her for advice.  (Although Claim of Right won't work -- that could be a profit center.)