Employee reporting of repayment. The wages paid
in error in the prior year remain taxable to the employee
for that year. This is because the employee received and
had use of those funds during that year. The employee
isn't entitled to file an amended return (Form 1040X) to re-
cover the income tax on these wages. Instead, the em-
ployee is entitled to a deduction (or credit in some cases)
for the repaid wages on his or her income tax return for
the year of repayment.
