DianeC958
Expert Alumni

Deductions & credits

1) You can file a Claim of Right on your 2019 tax return since that is they year that the money was repaid.

 

Claim of Right for Repayment over $3,000

 

On TurboTax, you will go to the

  •  Federal Taxes,
  • Deductions and Credits 
  •  Other Deductions and Credits
  • Other Deductable Expenses

First question about Generation-Skipping taxes No

Second Question Any Less Common Expenses No

Third Question Second Option put the amount of the Repayment if it was over $3,000

 

 

Method 1.

 

Figure your tax for the year of repayment claiming a deduction for the repaid amount.

 

Method 2.

 

Figure your tax for the year of repayment claiming a credit for the repaid amount. Follow these steps.

  1. Figure your tax for the year of repayment without deducting the repaid amount.
  2. Refigure your tax from the earlier year without including in income the amount you repaid in the year of repayment.
  3. Subtract the tax in (2) from the tax shown on your return for the earlier year. This is the credit.
  4. Subtract the answer in (3) from the tax for the year of repayment figured without the deduction (step 1).

 

If method 1 results in less tax, deduct the amount repaid. If method 2 results in less tax, claim the credit figured in (3) above on Form 1040 or 1040-SR. (If the year of repayment is 2018, and you're taking the credit, enter the credit on Schedule 3 (Form 1040 or 1040-SR), line 13, and see the instructions for it.)

 

This is how to make the claim on your return.

 

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