Retirement tax questions

It depends. If you actually repay more than $3,000 in 2024 from a prior year (2023) you can use the steps here to decide what to do.

Repayment of previously taxed income: The Claim of Right is explained more in the article below.  However I will add some information here about how to report on your tax return to determine if it applies to you and how you prefer to enter it on your tax return.

• What is a claim of right repayment?
  • Income Reduction (most common), or
  • Tax Credit
  • The link above will walk you through the steps for each option.

Claim of Right

• If you had to repay an amount that you included in your income in an earlier year, because at the time you thought you had an unrestricted right to it, you may be able to reduce your income by the amount repaid in the current tax year if the amount you repaid is more than $3,000, or you may take a credit against your tax for the year repaid, whichever results in the least tax.