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Returning gross relocation payment tax refund

So I have to pay back the gross amount of the relocation payment I received at a previous company because I left before completing a year. I received the payment in 2021 and will be paying it back in 2022. Since I will be paying back the gross amount which is more than the net amount I received, how can I go about getting the tax refunded for this? Will I be able to file some kind of amended tax return this year or do I have to wait until I file taxes for 2022 in the beginning of next year?

I would be extremely grateful if someone could tell me how the process works!

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2 Replies

Returning gross relocation payment tax refund

if the repayment was more than $3,000 you
can take a deduction for the gross repayment (wage amount) on schedule A line 16 denote as IRC 1341 repayment

OR
recompute the taxes in the year you received the payment by excluding the payment.
the decrease in taxes is taken as a credit on schedule 3 line 12d denote as IRC 1341

 

if less than $3,000 the tax laws say you are not entitled to a deduction or credit.   state laws may be different

 

for more info see pub 525

https://www.irs.gov/pub/irs-pdf/p525.pdf 

Returning gross relocation payment tax refund

@bcbkakljdasdas - and these adjustments would occur on your 2022 tax return next year.  You can not amend the 2021 tax return to reflect this situation. 

 

were you asked to pay 100% of the gross amount or 100% of the gross amount less social security and Medicare tax?  The federal and state withholdings would come back to you via the 2022 tax return as discussed by @Mike9241 , but SS and Medicare should come back from the employer (i.e. netted from what you are paying them back)

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