Correct repayment amount when claiming the tax credit for the overpayment

[fieldcoil]

Hi there,

 I was notified by my former employer that I was overpaid in 2023 by their mistake. The gross pay amount is around $5200 and the net pay amount is around $3100. I repaid them the amount of net pay ($3100) in 2024.

I am preparing my 2024 tax return and want to claim the tax credit for the repayment since the amount of the repayment is greater than $3000. My question is which is the correct amount, $5200 or $3100, when I determine the overpaid tax in 2023? 

Thanks!

[maglib]

@fieldcoil 

it  depends how your employer handled the mess, if they adjusted their taxes paid to the govt in 2023 or 2024.

If they adjusted payments to taxing authorities in 2023, they should have issued you a revised 2023 W-2 and you would need to prepare an amended tax return for 2023.  They should also pay to do this return as it is their error.

If they did it in 2024, then Your employer should have issued your W-2 this year reflective of what you refunded them, which then would show reduced wages this year and less taxes paid as you are a cash basis taxpayer. 

I'm so sorry this happened to you.

Good luck.