Thank you for this post it was the most helpful information I found anywhere.
My wife and I received a couple letters of repayment of overpayment over $3000 for a prior year. I am trying to calculate what our tax in 2019 would have been to take the credit in 2020. The letter basically says, you repaid, we can't change your W-2, hope this letter helps but you are on your own.
This letter is in regards to salary overpaid to you in 2019. This letter certifies that in 2020, you repaid *the employer* $XXXX for your 2019 salary overpayment.
The total amount repaid was recovered as follows:
Repayment
Reversed OASDI
Reversed Medicare
Reversed Retirement
Reversed TSP
Reversed FEGLI
Repayment Non Taxable Entitlement(s)
All these fields ($ values left out) add up to the total repayment amount mentioned in the first part.
My question is which apply to the reduction in salary in 2019 to calculate the credit applied to the 2020 tax return? All of them or just some of them. TSP for instance is like a 401K and this was set to traditional mode reducing income. Should I deduct the TSP from the total repaid to get the correct income to calculate 2019 tax? I am also reading some other things that might indicate the OASD and Medicare will need to be recovered differently so perhaps those should be subtracted from the repaid amount that I would be deducting from my income to calculate the tax I should have paid in 2019 for the credit in 2020?
