Wages paid in error

[gloworm64]

I was overpaid in 2022 and have been repaying the overage.  I repaid $1,394.78 in 2023, which is taken directly out of my check.  Am I entitled to a deduction/credit for the repaid wages?

[AmyC]

It depends. On the federal level, no. The IRS has placed a temporary ban on claiming amounts below $3,000. See What is a Claim of Right Repayment or  Pub 525.

On the state level, maybe. It depends on which state you are in. I know at least nine states, including Arizona, Georgia, Kansas, Maine, Massachusetts, Minnesota, Missouri, New York, and Virginia, along with the District of Columbia, have a similar deduction but the rules vary and more states may allow it now.