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June 26, 2024
Question

Tuition Repayment Clawback

  • June 26, 2024
  • 1 reply
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Hello,

I am leaving my employer who I have received tuition assistance from, which had been returned back to me as taxable income. In accordance with their policy, I will owe back the tuition they paid within a certain time span. I am being asked to return the net amounts to the company over the past two years. While I am not returning the gross amount, as I understand it I have still paid taxes on that amount. Am I correct that I would need an adjustment? Is there a way for me to adjust my prior years' tax returns? Do I need my employer to correct my W2s? They are being a little difficult about it. I am unsure what to do going forward.

1 reply

June 26, 2024

In a Tuition Repayment scenario, if you repay more than $3,000 of wages you can take a "claim of right deduction" for the taxes incurred.    This article summarizes how to report the deduction in the TurboTax software.  If you choose the deduction, there is no need for a corrected W2 nor an amended tax return.

 

[Edited 6/28/2024|12:31pm PST]