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Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. Disability payments. You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an ear- lier year. If you received a lump-sum payment from the SSA or RRB, and you had to repay the employer or insur- ance company for the disability payments, you can take an itemized deduction for the part of the payments you in- cluded in gross income in the earlier year. If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. Claim the deduction or credit in the same way explained under Repayment of benefits re- ceived in an earlier year under Repayments More Than Gross Benefits next. Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you re- ceived. If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Don’t use Worksheet 1 in this case. If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. Joint return. If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's doesn’t, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. You do this to get your net benefits when figuring if your combined benefits are taxable. Example. John and Mary file a joint return for 2022. John received Form SSA-1099 showing $3,000 in box 5. Mary also received Form SSA-1099 and the amount in box 5 was ($500). John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when fig- uring if any of their combined benefits are taxable. Repayment of benefits received in an earlier year. If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you may be able to deduct part of this negative figure that represents benefits you included in gross income in an earlier year, if the figure is more than $3,000. If the figure is $3,000 or less, it is a miscellaneous itemized deduction and can no longer be deducted. Deduction more than $3,000. If this deduction is more than $3,000, you should figure your tax two ways. 1. Figure your tax for 2022 with the itemized deduction included on Schedule A (Form 1040), line 16. 2. Figure your tax for 2022 in the following steps. a. Figure the tax without the itemized deduction in- cluded on Schedule A (Form 1040), line 16. b. For each year after 1983 for which part of the neg- ative figure represents a repayment of benefits, re- figure your taxable benefits as if your total benefits for the year were reduced by that part of the nega- tive figure. Then, refigure the tax for that year. c. Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. d. Subtract the result in (c) from the result in (a). Compare the tax figured in methods 1 and 2. Your tax for 2022 is the smaller of the two amounts. If method 1 re- sults in less tax, take the itemized deduction on Sched- ule A (Form 1040), line 16. If method 2 results in less tax, claim a credit for the amount from step 2c above on Schedule 3 (Form 1040), line 13z. Enter “I.R.C. 1341” on the entry line. If both methods produce the same tax, de- duct the repayment on Schedule A (Form 1040), line 16. Worksheets Blank Worksheets 1 through 4 are provided in this sec- tion. 1. Worksheet 1, Figuring Your Taxable Benefits. 2. Worksheet 2, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993). 3. Worksheet 3, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994). 4. Worksheet 4, Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3). Publication 915 (2022) Page 15