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Level 2
posted Mar 16, 2022 10:33:36 PM

How to deduct a Service Retirement Overpayment for 2017-2021?

I am on a defined benefit pension plan and a plan audit determined I was overpaid over three years over $250,000. I appealed the findings and settled on an overpayment amount of $30,050.18 which I paid back to the retirement system in July 2021. They system gave me information that the repayment may be deductible under IRC Section 165(a). I am wondering how to claim this deduction this year as it is a definite reduction in earnings for three prior tax years. IRS Ruling 2002-84 provides for overpayments repaid via lump sum in a tax year subsequent to the years in which the overpayments were incurred may be entitled to a deduction etc etc. This is the first time in years I have not itemized deductions but I think I need to switch it over to itemizing to take this deduction. Thanks 

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Level 2
Mar 16, 2022 10:59:22 PM

I found the answer and was able to include it in misc deductions. thank you.