You make these adjustments in 2024, the year the repayment was made. Very briefly (there are other old posts with detailed instructions, try a google search)
1. For the federal taxes, you can either:
a. claim a special itemized deduction for the repayment amount, or
b. claim an IRC 1341 Claim of Right tax credit.
The deduction is included in all versions of turbotax, but you won't receive a tax benefit unless you already itemize your deductions. The claim of right credit requires making a manual adjustment using Turbotax (2024) installed on your own computer from a CD or download, it can't be done in turbotax online. You can claim a credit for the amount that your 2023 taxes would be been reduced if the bonus was not included in your wages. You must calculate the credit amount yourself, and manually enter it on your 2024 tax return. You can use either the deduction method or the claim of right method, but not both, and you can use whichever method saves you more money.
2. for state income taxes, you must check your state for a similar claim of right procedure. Since every state is different, we can't tell you without more information, but you have several months to research it.
3. For social security and medicare, you must request a refund yourself using form 843. This is not included in turbotax and not part of your regular tax return, you will fill it out and file separately. You will need to include documentation (proof that you paid social security and medicare taxes on the wages and proof of repayment) along with a letter from the employer where they state that they will not adjust or refund your SS and medicare taxes for you.
