Repaid 2017 Bonus

[tsgrayson]

I received a 25K starting bonus in Oct 2017. After taxes, it was ~19K. I left the company in April 2018 and had to pay back 17K. How do I claim that repayment on my 2018 taxes?

[DanielV01]

This is a claim of right repayment.  There are two different ways to claim this.  One way is to claim the income as a deduction on your 2018 return.  This method will work well if your 2018 income is significantly more than your 2017 income (putting you in a higher tax bracket than when you were originally taxed on the income), and you are already itemizing deductions this year.  

The other way to claim is probably more beneficial:  claiming a credit.  Using this method, you calculate the difference between what you paid in tax last year compared to what you would have paid had this income not been included in your 2017 tax return.  

To claim this using either method in TurboTax, please note these instructions provided by Critter#2:  https://ttlc.intuit.com/replies/7016599

[tsgrayson]

Thank you, what happens with the taxes that were removed from the bonus?

[DanielV01]

Since that was reconciled last year, it gets factored in if you take the credit.  The credit is based off of doing an amended return that you won't submit as an amended return.  Rather, you change the income, see how much more refund you would have received, and then report using the credit instructions posted above.  If you need the deduction instructions, I can provide a link to those as well with some screen shots.