Replacing private disability pay with Social Security can lead to tax woes. A disabled man got taxable benefits under his employer’s insurance policy and reported the amounts as income on his tax return in the year he received them. He was also required to apply for Social Security disability and turn over the benefits to the insurer. Social Security paid him in Dec. 2010, four years after he first applied, and in Jan. 2011 he remitted most of the funds to the private insurance company. The Social Security benefits are income in 2010, but he can’t take a deduction for the reimbursement payment until 2011 (Nordloh, TC Summ. Op. 2017-37).