Ask Larry

I started social security benefits in August 2022, but I want to withdraw them now, March 2023. I'm within the one-year limit. I had other income in 2022, so the tax on the benefits would be high. So I want to give them back. But: if the income is in 2022 and the withdraw and payback is in 2023, Do I need to pay IRS income tax on the benefits with my 2022 taxes and then somehow take it back on my 2023 taxes? That would be difficult: I can't give the IRS 20% or 30% if I have to give 100% back to the SSA.

Hi. Your tax obligation for 2022 will be based on the amount of benefits you collected that year. That's true even if you later pay those benefits back as a result of withdrawing your application. You could, though, potentially receive a credit for the benefits repaid in 2023 when you file your tax return for 2023.

Income tax regulations are outside of my area of expertise, though, so you you should probably check with the IRS or refer to the following IRS publication: https://www.irs.gov/pub/irs-pdf/p915.pdf.

Best, Jerry