@Anonymous wrote:
Thanks. Does also also cover GA state taxes and FICA taxes?
I was also reading posts from another user who suggested that we could also claim it as a special itemized deduction (uncommon deduction)? Is that easier and have less chances of an audit (just a major headache and expensive to use the services for a CPA - especially since this entire debacle is caused by my employers screw up).
If you had a reasonable belief at the time that you had an unrestricted right to the money, you can use either the deduction or the credit. If you knew you did not have an unrestricted right to the money, you can only use the deduction.
Generally, the deduction is better if your income and tax bracket will be higher in 2022 than the year the wages were paid, and the credit is better if your income and deductions will be lower.
I don't think anyone here really knows what triggers an audit, so that's hard to say.
I describe the situation with GA and FICA in my other, longer answer.
