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Deductions & credits
Oh, I see what you mean about the EIC. And Pub. 525 isn't clear about exactly what it means by "your tax." You really want to compare the bottom line of the return, not just the total tax amount. So, yes, you should include the EIC in the credit amount. What happens if you compare Form 1040 line 34 or line 37 on the original and recalculated returns? That should take the EIC into account.
You are not supposed to get a revised W-2, and you do not file an amended return for 2021. The only way to deal with the repayment is to handle it on your 2022 tax return. You take either the claim of right credit, or an itemized deduction for the full amount that you repaid, whichever works out better.
March 30, 2023
2:29 PM