How to report ESD overpayment repayments on 2025 tax return?

This is actually a common question! If you repaid unemployment benefits in the same year you received them, it's straightforward - you just report the net amount on your tax return. But since you paid taxes on the benefits last year and repaid in 2025, you have two options: 1. Take an itemized deduction for the repayment amount under "Other Itemized Deductions" on Schedule A if it's over $3,000 (which yours is at $4,780) 2. OR claim a credit for the amount of tax you paid on that income last year (this is called a "claim of right" provision - see IRS Publication 525) You'll want to do the calculation both ways to see which saves you more money. You don't need to amend last year's return.

Had the same problem in 2024. I thought i needed to do a tax amendment but my tax guy said DONT DO THAT!! He did option 1 from what the other person said. The itemized deduction thing. Saved me a bunch of $$$ i guess. Good luck with ur taxes!

I dealt with this exact situation last year. Here's what you need to know: If your repayment is over $3,000 (yours is), you have two options as the first commenter mentioned. Most tax software can handle this situation, but you need to make sure you enter everything correctly. For the itemized deduction route: It goes on Schedule A as an "Other Itemized Deduction" that's NOT subject to the 2% AGI floor. This only makes sense if you're already itemizing or if this deduction pushes you over the standard deduction threshold. For the tax credit route: You calculate how much extra tax you paid because of including that income last year, and take a credit for that amount. This is actually pretty complicated and you might want a tax professional to help with this calculation. Also, make sure you get documentation from ESD showing the repayment amount and date. You'll need this if you're audited.

ur going 2 need a 1099-G from esd for reporting this stuff. they should send it by the end of january i think. watch ur mail!

This whole ESD overpayment thing is a NIGHTMARE!!! I had to repay $6,200 last year for benefits they approved me for during COVID and then changed their minds about TWO YEARS LATER!!! And then trying to figure out the tax mess on top of it? The system is BROKEN! I ended up hiring a tax person because it was so confusing. I think I did that claim of right thing they mentioned above but honestly I just signed what my accountant put in front of me. Good luck!

Has anyone tried calling ESD directly to ask about the tax implications? I've been trying to get through to them for days about a different tax issue but can't get a human on the phone. I keep getting disconnected after waiting on hold for 45+ minutes. It's incredibly frustrating when you need answers before the tax deadline.

Thanks everyone for the helpful responses! I'm going to gather my documentation and see if taking the itemized deduction or the tax credit makes more sense in my situation. Might talk to a tax professional too just to make sure I'm doing it right. I'll update here if I learn anything useful that might help others in the same boat.

Wait i just thought of something... did u get a letter from ESD showing how much u paid back? make sure u have that for ur tax records!!!!