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J
JONI9611
Level 4
February 25, 2026
Question

repayments for taxable benefits

  • February 25, 2026
  • 1 reply
  • 5 views

Ho do you get a credit or deduction for repayment of third party sick pay taxed in prior year and had to pay back in current year?

1 reply

Just-Lisa-Now-
Just-Lisa-Now-Intuit Community Champion
Intuit Community Champion
February 25, 2026

Pub 525, Repayments, Page 37

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
    J
    JONI9611Author
    Level 4
    February 25, 2026

    I have read it. All I get is I would have to itemize to get the credit.

    Just-Lisa-Now-
    Just-Lisa-Now-Intuit Community Champion
    Intuit Community Champion
    February 25, 2026

    Is it less than $3000?   

    Directly from Page 37  you can take a deduction on Sch A or a credit

    Repayment over $3,000.

    If the amount you repaid was more than $3,000, you can deduct the repayment as an other itemized deduction on Schedule A (Form 1040), line 16, if you included the income under a claim of right. This
    means that at the time you included the income, it appeared that you had an unrestricted right to
    it.

    However, you can choose to take a credit for the year of repayment. Figure your tax under both methods and compare the results. Use the method (deduction or credit) that results in less tax.

    ♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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