Get your taxes done using TurboTax

You can do a claim of right repayment in the year you had to pay back the disability income.  A claim of right repayment is a deduction on your tax return to report income you were required to pay back that was received in a previous year.  You have two options to report the claim of right repayment.  You can take a simple deduction in TurboTax, by providing these steps provided by TurboTax:

1. Go to the Did you pay any generation-skipping taxes in 2024? screen.
2. Answer the questions until you arrive at the Did you have any of these other expenses? screen, and select Yes.
3. On the Tell us about your other expenses screen, enter the amount of the repayment in the Claim of right repayment over $3,000 box and select Continue.

Or if you are using TurboTax Desktop, you can allow the software to do the calculations for you by following these steps:

1. Sign in to your account.
2. Select the return for the year you received the money (for example, if you're repaying money you received in 2023, open your 2023 tax return).
3. Select Save As in Windows or Copy in Mac to save a copy of the return. This is the form you'll be working in for this part.
4. Select Forms in the upper-right corner.
5. Select Form 1040 from the list on the left to open the form (or Form 1040-SR, if applicable).
6. Find the Total Tax line and make a note of this number.
7. Adjust the income you originally reported by subtracting the amount you repaid. For example, if you reported $50,000 in income, but had to repay $9,000, you'll adjust the income to $41,000.
8. After you enter the updated income, TurboTax will automatically calculate your updated tax liability. To determine your Claim of Right Credit, subtract the amount of the updated tax liability from the original tax liability.

Then follow these steps to apply the credit:

1. Return to the current tax year (the credit can only be applied using the Forms mode in TurboTax Desktop).
2. Select Forms.
3. Choose 1040/1040SR Wks from the list and the worksheet will appear.
4. Scroll to the Other Credits and Payments Smart Worksheet (you can find this in a box near the end of the worksheet).
5. Enter the credit amount you calculated on Line D, Claim of Right, IRC 1341 credit for repayments of prior year income.
6. Select the Step-by-Step or Easy Step icon to return to the interview mode and finish working on your tax return.

For more information, see the link below:

• What is a claim of right repayment?

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