neilbrink Posted March 12, 2014 Report Share Posted March 12, 2014 Client was overpaid $6746 in 2012 by an insurance company for disability benefits and paid them back in 2013. He has a letter from the company that is a "Claim of right" letter that allows him "to either claim credit on your current income tax return for taxes paid on your prior income tax return or, take a deduction on your current income tax return." On what line do we claim the tax credit? Line 53, Other credits? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 13, 2014 Report Share Posted March 13, 2014 I would take on Sch A or the same line where he reported that income the previous year. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 13, 2014 Report Share Posted March 13, 2014 It has been my experience that taking the deduction of the taxes paid on the amount repaid is much better. Quote Link to comment Share on other sites More sharing options...
Cathy Posted March 13, 2014 Report Share Posted March 13, 2014 Refer to Publication 525 under "Repayments"....."Method 1 or Method 2". It lists the two options you have, depending on the amount of the repayment. 1 Quote Link to comment Share on other sites More sharing options...
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