This is a claim of right repayment.
If the repayment is $3,000 or less, it is a miscellaneous itemized deduction and can longer be deducted.
If the repayment exceeds $3,000, you can only report it in the year you actually repaid the claim.
There are a couple of ways to get a tax break by reporting the repayment in the year of repayment:
- You'll claim it as a simple deduction from the current year's income. This is the preferred option if you itemize your deductions
- Use TurboTax Desktop to figure out the amount of tax you overpaid and take a refundable tax credit
- Test both methods and choose the one that results in the lowest tax.
Please read this TurboTax Help topic for more information.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
