I was paid a signing bonus in 2016 (less applicable taxes). I left before my commitment for the bonus and was required to pay back the full amount in 2017. Since it counted as income in 2016 - does it could as a deduction in 2017? And if so, how do I do that?
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This situation is referred to as a Claim of Right under IRC Section 1341. It can be claimed as either an itemized (miscellaneous) deduction or as a credit if the amount repaid is more than $3000. The deduction is the simpler way to claim your repayment, but a credit might save you more money.
To claim the repayment as an itemized deduction, you would use TurboTax Online Deluxe or a higher version.
If you decide to claim your repayment of over $3000 as a credit, follow the information starting on page 33 of IRS Publication 525 Taxable and Nontaxable Income under Repayments. This requires a special computation, and you would need to use a Desktop version of TurboTax and enter your credit using the Forms mode.
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