If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it; OR if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it.
A Claim of Right Repayment is a deduction you can take in the current tax year if you're required to pay back income over $3,000 from a previous tax year that you thought you could keep. You reported and paid taxes on the money, not knowing you'd have to pay it back.
What is a Claim of Right Payment
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