I was paid a relocation allowance by my company in 2021 to move from New York to Louisiana. I received this in two installments of roughly $7,000 each, one before the move and one after (so it was taxed half in NY and half in LA). I signed an agreement that I would repay if I left the company within two years. I was there just over a year before leaving in June 2022.
I received a bill to repay in September 2022for a total of $23k (the total "tax topped" amount of the relocation allowance). I repaid it. I would like to get the roughly $9k that I overpaid on my 2021 taxes back. My question has two parts:
1. Do I have to file an amended return for 2021, or since I repaid this in 2022, would it be a reduction in my taxable income for 2022?
2. How do I file this and what supporting documentation is required? I have the paperwork showing the billing I got from my company that I had to repay, but do I need a new W2 from my company or what?
Thank you.
My first suggestion would be to check with the HR Department of your former employer (if possible) to see how they will be they will be handling the repayment. You may require a corrected W2. IRS Publication 529 details of repayments of Relocation Allowances. Also, I found someone who had a similar case to yours in the community and I will share that link below:
I will also recommend that you review the Repayment Section (Page 36) of IRS Pub 529.
https://www.irs.gov/forms-pubs/about-publication-529