Maybe. The Internal Revenue Service does allow a deduction for wage repayments. However, because of the Tax Cuts and Jobs Act, it has abolished the Miscellaneous section on the Form 1040, Schedule A. The repayment was previously entered on line 23 of the Schedule A with a 2% limitation. Because of tax reform, you can no longer claim the repayment as a deduction if the repayment is $3,000 or less.
If the amount of the repayment was more than $3,000, and you can itemize deductions on the Schedule A, you can do the following while in the TurboTax program:
- Select the Federal Taxes tab
- Click Deductions and Credits
- Select I'll chose what I work on
- Scroll to Other Deductions and Credits
- Select Start across from Other Deductible Expenses
- Once you land on the Tell Us About.... screen, type Repayment of Wages and the amount.
- Click Continue then the Yes button on the following screen
- Select Claim of right repayment over $3,000, enter the amount.
- Click Continue
You will land on the acknowledgement page.
To view the entry while on the acknowledgement page, you should:
- Click Forms located in the upper right corner of the screen
- The Schedule A form will appear in the window.
- Scroll to line 16 of the form. The description and the amount of the claim is shown
- At the bottom of the Schedule A window, select Close Form, it will take you back to the interview screen.
Select another tab or section to finish completing your return.
