Short version: In 2021, I had to repay my employer part of my sign-on bonus that I was granted in 2020. As a result I overpaid my NY state taxes for the tax year of 2020. I have been told I need to claim a "IRC 1341 credit" when I file the taxes for 2021, in 2022. If so, how do I adjust my NY state taxes? Do I need Turbo Tax Desktop for this or will Turbo Tax Online do it for me? Or is this too complicated that it warrants a in-person CPA help?
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Short version: In 2021, I had to repay my employer part of my sign-on bonus that I was granted in 2020. As a result I overpaid my NY state taxes for the tax year of 2020. I have been told I need to claim a "IRC 1341 credit" when I file the taxes for 2021, in 2022. If so, how do I adjust my NY state taxes? Do I need Turbo Tax Desktop for this or will Turbo Tax Online do it for me? Or is this too complicated that it warrants a in-person CPA help?
you will not get a corrected W-2 because you did not make the repayment in 2020.
how much did you repay? if $3,000 or less there is no deduction or credit available. if more than $3,000, then in 2021 when you made the repayment, you can take as a deduction on schedule A line 16 denote as IRC 1341 repayment
OR
recompute the taxes in 2020 by excluding the amount of repaid wages from line 1 of the w-2
the decrease in taxes is taken as a credit on schedule 3 line 12d denote as IRC 1341 on your 2021 return.
see this link for instructions on computing credit
Thanks for the answer - you clarified a lot of my questions. Yes it is more than $3000. My question was specific to NY state taxes. Will the instructions you pointed me to cover both federal and NY state specific taxes? Would the CD I buy need to be of a specific type for NY? I have only ever used the online version.
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