Employer sued for unemployement benefit received

[helow]

TP was laid off and received enemployment. She paid federal taxes on the benefit. Company then sued her and won the case. Can TP exclude this amount from her return? I think so but would like your input. How do you treat the taxes she paid on the benefits?

Thanks

Helow

[kcjenkins]

NO. I do not think she can deduct anything here. Let's restate the facts, as I understand them. She was employed, then laid off, and drew UC. THEN, she was sued for wrongful acts, and she lost, the employer won. The court ruled that she had to repay something to the employer, is the assumption I am drawing, from the very brief facts you posted.

If I am right, the repayment had to do with her wrongful act, and had nothing to do with the UC she received, even if the amount of the judgement against her was based, in whole or part, on that UC she got. More facts MIGHT change my opinion, but based on what I know so far, I'd say no. She can not deduct payments she had to make because of a wrongful act she committed.

[helow]

KC.

Thanks for your response.

Here is what I understood from her. She was terminated (don't know why). She qualified for UC and received for couple of month. She was sued and had to repay all the UC she received. Her position is that since she has to return the money she can exclude it and attached the jusgement letter. I think she has a valid point. This is not income to her since she is must return it in installment. What do you think?

Thanks much

Helow

[Bart]

I do not understand how a company can sue her to make her pay back unemployment.

[samingeorgia]

Companies are getting more aggressive in appealing UC claims and Labor departments are running low on money, so....

I have this identical situation with a client who was let go by a major drug chain. They fought him tooth and nail and he had to repay the DOL. Lucky for him, the 2009 amount was just a hair over the $ 2,400 exclusion amount.

A few years ago, in another life, I was treasurer of a company and wasted a couple of hours with a DOL appeal. The employee got into an argument with the company president, and said, quote: "If that's they way it is, I'm out of here!" Gathered up his stuff and left; never came back. Seems to me that he quit, but good old Georgia gave him unemployment.

[kcjenkins]

KC.

Thanks for your response.

Here is what I understood from her. She was terminated (don't know why). She qualified for UC and received for couple of month. She was sued and had to repay all the UC she received. Her position is that since she has to return the money she can exclude it and attached the jusgement letter. I think she has a valid point. This is not income to her since she is must return it in installment. What do you think?

Thanks much

Helow

More questions. Did the 'company' sue her, or did they just appeal the determination? And it that is what happened, then she had to repay the state UC rather than the company. That is a slightly different situation. Need more clarity.

[jainen]

>>Need more clarity<<

It seems clear enough to me. Just review "Repayments" on page 90 of Pub 17 at My link.