Only the amounts of tuition assistance exceeding $5,250 should have been taxed. Since the amount is under $3,000, the only option is to file an amended return. The Claim of Right alternative is for amounts over $3,000.
If you choose to amend, for steps on how to get the CD/Download for 2019 and upload the .tax2019 file, see: How do I amend(change) a prior year? You will need to convert to TurboTax CD/Download for the 2019 tax rules.
To reduce your income without Form W-2C, create an offsetting adjustment in Other Reportable Income. This will only reduce your withholding tax, not the Social Security and Medicare portion, or 7.65%. To do this in TurboTax, follow these steps:
- From the left menu, go to Federal and select the first tab, Wages & Income.
- Add the adjustment by scrolling down to the last option, Less Common Income, and Show more.
- Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start.
- Choose the last option, Other reportable income and Start and Yes.
- Enter the applicable description and amount and Continue.
- Enter the adjustment to your wages for the tuition assistance that was returned as a negative amount.
- For the cost description, include Tuition Reimbursement Returned
