Social Security Withdrawal Request/SSA-1099 Question

[CountingDown2014]

My spouse started collecting SS retirement benefits in June 2018 but then we decided to withdraw the request in October 2018 and defer collecting these benefits until a later date. In November 2018 we received a letter from the SSA saying the withdrawal request could only be approved if all SS benefits paid are repaid and we sent SS a check the next day in the requested amount and the SSA cashed this check in the first week of December.

In January we received an SSA-1099 which only showed the amount of benefits received in 2018 but not the amount which we repaid in 2018 such that the net benefits for 2018 was the amount of benefits received and not $0. After numerous calls to the SSA and our regional office in which we were under the impression that my spouse would be receiving a corrected SSA-1099 reflecting net benefits for 2018 in the amount of $0, today we received a "Corrected" SSA-1099 which was identical to the one received in January (i.e., only reflecting benefits paid but not repaid).

After being on hold with the SSA for over an hour and being disconnected before speaking to anyone, I thought I'd ask here if anyone has dealt with this situation before and knows whether I am correct in thinking the SSA-1099 should reflect $0 2018 net benefits.

The only thing I would add is that shortly after speaking to someone in the regional office in February, my spouse received a letter from the SSA approving the withdrawal request. Perhaps it might be the SSA's view that the benefits weren't repaid until the withdrawal request was approved even though they had received their repayment back in the beginning of December but this is only speculation. And, if this were the case, presumably my spouse would be receiving a negative SSA-1099 for 2019 reflecting these repayments.

Any help anyone could provide would be greatly appreciated! Thanks very much.

 

[GrayHare]

SSA can be very slow on anything out of the ordinary. Sounds like you have proof SSA during 2018 accepted your return of funds. If that amount equals how much you had received during 2018, if it were me I'd show $0 from SSA on my taxes and include a detailed explanation with my return because if that $0 does not match what's on the SSA-1099 the IRS computer is going to flag your return for scrutiny.

 

[CountingDown2014]

GrayHare - Thanks for your response. My plan is to go with your approach and cross my fingers.

 

[CountingDown2014]

As I finalized our return for filing by Turbotax, it appears that there's no way to provide an explanation of the 1099-SSA discrepancy or upload any documents (such as the SSA letter or a copy of our check to the SSA) and Turbotax seems to suggest that these would be ignored anyway during the initial IRS review. So it looks like I am going to have to wait until an IRS audit to address the discrepancy...

 

[CRLLS]

From a pure paperwork status, once you returned the SS dollars and your now down to 0 actual benefit, there should be no reason for a 1099 to be issued for 0 amount. Now how the difference between the 1st 1099 and your final 0 benefit gets reported to the IRS, I have no idea. Maybe a corrected 1099 and maybe not. Maybe you could call the IRS and ask them how to deal with this BEFORE an IRS audit gets triggered.

 

[pb4uski]

As I finalized our return for filing by Turbotax, it appears that there's no way to provide an explanation of the 1099-SSA discrepancy or upload any documents (such as the SSA letter or a copy of our check to the SSA) and Turbotax seems to suggest that these would be ignored anyway during the initial IRS review. So it looks like I am going to have to wait until an IRS audit to address the discrepancy...

Yeah, just keep your documentation and you should be all set. Be sure to update us as to what happens.

 

[Bir48die]

From a pure paperwork status, once you returned the SS dollars and your now down to 0 actual benefit, there should be no reason for a 1099 to be issued for 0 amount. Now how the difference between the 1st 1099 and your final 0 benefit gets reported to the IRS, I have no idea. Maybe a corrected 1099 and maybe not. Maybe you could call the IRS and ask them how to deal with this BEFORE an IRS audit gets triggered.

This is correct.

 

[CountingDown2014]

I did speak to the IRS this morning and was told that the IRS is going to go with what the SSA says so to the extent there is a discrepancy between my return and the SSA-1099, that would likely trigger an audit. And, in the event of an audit, the IRS is generally inclined to defer to the SSA (another government agency) so a copy of our check cashed in 2018 may not be sufficient. He recommended I try (once again) to clear this up with the SSA. I also called the SSA (for the fifth time) and someone was going to send a priority message for another corrected SSA-1099 that should be acted on within 15 days but there was no way the person who would review that message could contact me and the person I spoke to said she couldn't tell me what that person would do. The frustration continues...

 

[CountingDown2014]

Just an update - today out of the blue we received a second corrected SSA-1099 showing zero net benefits for 2018. At least I have the peace of mind knowing our 2018 taxes are consistent with this revised document so when we do get audited, there shouldn't be an issue.