This is a claim of right repayment. If the repayment exceeds $3,000, you can only report it in the year you actually repaid the claim.
There are a couple of ways to get a tax break by reporting the repayment in the year of repayment:
- You'll claim it as a Miscellaneous itemized deduction in Schedule A. This is the preferred option if you itemize your deductions
- Use TurboTax Desktop to figure out the amount of tax you overpaid and take a refundable tax credit
- Test both methods and choose the one that results in the lowest tax.
Please read this TurboTax Help topic for more information.
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