What is the IRC 1341 repayment credit in layman's terms?

[magicman909]

I believe it is reported on line 13D, not 12D.

Thanks,

Steve

[user17709413669]

I need help on the desktop version here is my example. I am paying back Social Security Disability (this is from 2018) I received the 1099 which shows the total amount as a negative. I want to claim the right for repayment in the forms section. I entered in the total amount of payment (3,001) is this correct? Or am I to enter in the tax paid? If so, how do I calculate the tax from that specific tax year? Do I also enter in the 1099 negative number when i am entering in ths right to repayment section? 

[Mike9241]

IRC code section 1341 governs 

If repayment is in an ensuing year, and the repayment was more than $3,000, you
can take it as a deduction on Schedule A line 16, denoted as IRC 1341 repayment, or
recompute the taxes in the year you received the payment by excluding the payment.
The decrease in taxes is taken as a credit on Schedule 3 line 13b

[GreenApple123]

Really like your answer about IRC 1341 Claim of RIght.

I read pub 525 and California 540 CA instructions, it appears to be if you claim a credit on the federal return, you need to do a deduction on state and if you claim a credit on federal return, you can claim a credit. Do I have the misunderstanding?  What I would like to do is to take a credit on the federal return and also take a state credit on the CA state return using L78 of form 540. Is this possible? Thanks for your help!

[MarilynG1]

You may be able to take a deduction or credit in California for a Claim of Right Repayment entry in your Federal return, if the income was originally taxed in CA. 

• If you claimed a credit for the repayment on your federal tax return and are deducting the repayment for California, enter the allowable deduction on line 16, column C.
• If you deducted the repayment on your federal tax return and are taking a credit for California, enter the amount of the federal deduction on line 16, column B. 

If you choose to take the credit instead of the deduction for California, add the credit amount on line 88, the total payment line, of the Form 540. To the left of the total, write “IRC 1341” and the amount of the credit.

Here's more detailed info from the CA FTB. 

@GreenApple123