How to report VA UC repayment on taxes after PA claim was used to repay old benefits?
Looking for some tax guidance here! In 2020, I received unemployment from Virginia but ended up having to repay some of it (about $4,800) due to an overpayment. Fast forward to now - I recently had a PA unemployment claim and they took money from my PA benefits to repay what I owed to Virginia. Virginia just sent me a 1099-G showing the repayment. I'm using TurboTax and completely stuck on how to report this correctly. The repayment happened in one state but was taken from benefits in another state. Has anyone dealt with cross-state UC repayments on their taxes? I'm worried about getting audited if I don't report this properly!
15 comments
Join the conversation
Emma Thompson
You need to report this as "repayment of unemployment compensation" in TurboTax. When you get to the income section, after entering your 1099-G information, there should be a question about whether you repaid any unemployment benefits. Select yes and enter the amount from the Virginia 1099-G. Since you repaid benefits that were reported in a previous tax year (2020), you can take a deduction for the repayment on Schedule A if you itemize, or possibly use a special credit calculation if the amount is over $3,000. The IRS calls this a "claim of right" provision.
0 coins
Javier Cruz
•Thanks for responding! I did get to that part in TurboTax but got confused because technically PA UC repaid Virginia on my behalf - I never personally wrote a check. Does it still count as me repaying it even though it was an intercept between two state agencies?
0 coins
Malik Jackson
I had smething similar but with ohio and pa. its still counts as YOU repaying it even if they took it direct from ur benefits. the irs dont care HOW u paid it back just that it WAS paid back lol
0 coins
Javier Cruz
•That's a relief to hear! Did you have to attach any extra forms or documentation to your return to explain the situation?
0 coins
Isabella Costa
OH MY GOSH I'm dealing with EXACTLY this situation right now!!!! My benefits from 2021 in NJ got intercepted from my PA claim and I got a 1099 from NJ showing repayment. I'm FREAKING OUT about my taxes because I'm scared of getting audited too!!! Did you call the PA UC people to ask them? I've been trying for THREE DAYS and can't get through to anyone who understands what I'm asking!!!
0 coins
StarSurfer
•If you're struggling to get through to someone at PA UC who can help with this tax situation, I'd recommend trying Claimyr. I was in a similar situation with some complex benefit questions and couldn't get through on the regular line. Claimyr got me connected to a PA UC agent in about 20 minutes when I'd been trying for days on my own. They have a video demo at https://youtu.be/CEPETxZdo9E?si=WL1ZzVZWG3KiHrg2 that shows how it works. The agent I spoke with was able to walk me through the exact tax reporting process for my situation.
0 coins
Ravi Malhotra
Tax professional here. Inter-state benefit repayments are actually fairly common. When you receive a 1099-G showing repayment, you'll want to use Form 1040 Schedule A for itemized deductions if the repayment was for benefits you received and reported in a prior year. Look for "Other Itemized Deductions" and enter it there with a note that it's UC repayment. Alternatively, if you don't itemize, you may qualify for a credit calculation under section 1341 of the tax code if the repayment exceeds $3,000 (which yours does at $4,800). In TurboTax, search for "claim of right" or "repayment of income" for the proper entry screens.
0 coins
Javier Cruz
•Thank you for the detailed explanation! I found the "claim of right" section in TurboTax after searching. One more question - does it matter that the 1099-G from Virginia doesn't specifically say it's for repayment? It just shows the amount with a code next to it.
0 coins
Freya Christensen
not to hijack but i got a similar issue. PA took $ from my benefits to pay back NJ but i never got any 1099 from either state showing repayment happened. should i still claim it somehow?
0 coins
Ravi Malhotra
•You should contact NJ unemployment and request documentation of the repayment. You're entitled to receive a 1099-G or other documentation showing the repayment occurred. Without that documentation, you'll have a difficult time claiming the deduction if audited.
0 coins
Omar Hassan
When I was on unemployment in 2022 they took money from my PA benefits to repay an old overpayment from like 5 years ago. I just ignored it on my taxes and nothing happened. The IRS has bigger fish to fry than chasing down unemployment repayments lol. But that's just me, maybe do it right if you're worried.
0 coins
Emma Thompson
•This is not good advice. The IRS increasingly uses automated systems to cross-check tax returns against information returns like 1099-Gs. Ignoring reported income or deductions you're entitled to is asking for trouble, especially when the correct handling actually benefits you financially through either deductions or credits.
0 coins
Javier Cruz
Update: I ended up calling Virginia's unemployment office (took forever to get through) and they explained that the 1099-G they sent actually confirms the repayment amount. The agent walked me through which boxes on the form indicate repayment vs. new benefits. I was able to use this info with the "claim of right" provision in TurboTax like several of you suggested. Thanks everyone for the help! For anyone else facing this situation, definitely get documentation from both states involved before filing your taxes.
0 coins
Isabella Costa
•Thank you for updating us! I'm going to try calling NJ tomorrow. Did Virginia send you any additional documentation or just explain how to read the 1099-G they already sent?
0 coins
Eli Wang
•This is really helpful! I'm dealing with a similar cross-state situation (Maryland took from my benefits to repay Delaware). Quick question - when you called Virginia, did you have to provide any specific reference numbers or documentation to get them to explain the 1099-G? I want to make sure I have everything ready before I spend hours on hold with Maryland UC!
0 coins