Say I have to pay back my relocation payment to my employer because I left before a specified period like 1 year. Since I have to pay back the pre-tax amount and what I was given was the post-tax amount, how can I go about claiming a tax refund for the income that was initially withheld from me?
For example, I had a pre-tax relocation payment of $10k but only ended up receiving $7k after-tax. But upon leaving, I had to pay back the employer the total $10k. How can I claim the remaining $3k from the government? Is it possible? Especially if I was paid the relocation in 2021 but had to pay it back in 2022 (different tax filing years).
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Claim of Right
Follow the steps below for the method you have selected.
Taking the Credit in TurboTax
There are two components to taking the credit in TurboTax. The first part entails determining the amount of the tax that was overpaid in the year the income was actually received. This requires using the TurboTax Desktop product (or another method) to determine what the tax liability would have been without the income.
Taking the Income Reduction in TurboTax
Please refer to the following link for information:
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