If you are an employee, the malpractice payment is a job-related expense. And job-related expenses are no longer deductible on your Federal tax return.
In fact, under the Tax Cuts and Jobs Act, the itemized deductions for job-related expenses subject to the 2% of AGI floor are suspended for expenses incurred after December 31, 2017 through 2025.
Certain states (Alabama, Arkansas, California, Hawaii, Minnesota, New York and Pennsylvania) still allow some deduction of job-related expenses.
Therefore, if you are a resident of one of the above states, you could file an amended state return to claim that expense.
There is no need to file a federal amended return as there is no deduction.
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