Forced to repay sign on bonus of $5,000. It was taxed in 2021, but repayed back in 2023. When I do this in turbo tax, it uses the form 1099-G. Is that correct?

jsutton314 · ‎March 15, 2024

ee-ea · ‎March 15, 2024

See this IRS info

https://www.irs.gov/publications/p525#en_US_2023_publink1000229600

1099G has nothing to do with this situation.

DawnC · ‎March 15, 2024

No. That form reports income to you and will increase your 2023 taxes. You need to take a credit (Claim of Right) to lower your taxes. Instructions are in that link, but basically you need to figure out how much your 2021 tax liability changed because of the reduced income and enter a subtraction on this year's return.

Claim of Right 1341

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Forced to repay sign on bonus of $5,000. It was taxed in 2021, but repayed back in 2023. When I do this in turbo tax, it uses the form 1099-G. Is that correct?