I received relocation lumpsum from my employer in 2021, paid it back in March 2022. Should I wait until 2023 to file a claim of right?

[aidenpearce]

I received 11,000 from my employer as relocation bonus on 2021 but I left the company in 2022. I paid back 16,200 in 2022 March. The employer gave back a W2C with change in Social Security, Medicare wages and taxes paid but not in Wages, Compensation and Tips (Box 1).

I have 4 days left to file Income Tax returns for 2021 and I'm not sure whether or not I can claim the overpaid tax on my 2021 return.

Should I file 2021 return as it is and wait until I file 2022 return to file a claim of right?

Also, how can I claim back the state taxes that I paid to Connecticut  in 2021?

Thank you in advance!

[ErnieS0 · Accepted solution]

Yes. Wait until 2023 for filing the claim of right. The repayment was made in 2022 so it’s part of the 2022 that return that you will file next year.

You can’t get back any overpaid tax on your 2021 return. Your taxable income is unchanged before you did not pay back your relocation bonus until 2022.

You can get back Connecticut tax next year by filing Form CT-1040 CRC with next year’s state tax return.

[aidenpearce]

Thank you so much @ErnieS0!

I'm in a different state in 2022 and will not be paying Connecticut State tax for 2022. Will I still be able to do claim of right? In this case, should I report Income for 2022 as $0?