In March of 2017, I was required to repay my employer $9,000 for relocation bonus including Federal and State taxes paid on my behalf and reported as income in 2016. My employer explained that I would be able to take a “Claim of Right” credit in 2017 for the Federal and State taxes included in the repayment.
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Your employer is correct. The IRS provides a couple of different options: claiming a deduction on your current year income, or a credit based on the change that the amount would have made had the amount been correctly reported to you last year (not required to have been repaid). Click on this link to find an example on how to calculate the best tax treatment for you: Publication 525 - Taxable and Nontaxable Income ... - IRS Tax Map.
On TurboTax, you will go to the Federal Taxes, Deductions and Credits section. You will need to select on Other Deductions and Credits. Then, follow the instructions in the screenshots below. (Please note: the screenshots were taken using the online version of TurboTax. If you are in Desktop, the screen appearance may be a little different but the instructions should be very similar):
Your employer is correct. The IRS provides a couple of different options: claiming a deduction on your current year income, or a credit based on the change that the amount would have made had the amount been correctly reported to you last year (not required to have been repaid). Click on this link to find an example on how to calculate the best tax treatment for you: Publication 525 - Taxable and Nontaxable Income ... - IRS Tax Map.
On TurboTax, you will go to the Federal Taxes, Deductions and Credits section. You will need to select on Other Deductions and Credits. Then, follow the instructions in the screenshots below. (Please note: the screenshots were taken using the online version of TurboTax. If you are in Desktop, the screen appearance may be a little different but the instructions should be very similar):
DanielV01:
Your screenshots weren't posted on the Intuit website. Can you summarize the steps verbally?
Thanks!
Liz
This is a new forum layout. Some posts that have June 2019 dates are really older posts from the old forum that got moved over. So they might be for prior years. When they migrated over the dates got changed to June 2019. And the screen shots got deleted.
To follow up on this, where can you enter the credit amount on the 1040 using Turbo Tax's online platform? I have figured out how to do this on the NY state form, but cannot figure out how to do this for my federal return. Thank you.
You will need TurboTax CD\Desktop for a claim of right credit.
See the answer by awesome Expert Alumni @BarbaraW22 at claim of right with standard deduction.
You can transfer your tax data from online to desktop. Everything will be transferred up to the moment you click.
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