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IRC 1341 repayment credit -- but for state (Arkansas)?

Forum|Forum|6 years ago
February 10, 2020
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In 2019 I partially repaid a bonus I received in 2017. I am claiming the "Claim of Right" credit on my Federal Tax return per the process outlined here (not the deduction, the credit):

https://ttlc.intuit.com/community/taxes/discussion/what-is-the-irc-1341-repayment-credit-in-layman-s-terms/00/31751

and here

Page 34: https://www.irs.gov/pub/irs-pdf/p525.pdf

What I can piece together is what to do for my state taxes (Arkansas). I can't find any reference on Arkansas websites to this situation and my Turbotax program (Mac premier, desktop) doesn't seem to be incorporating the credit (which I manually entered via Forms on my Federal Tax) into my Arkansas tax return.

What should I do? Re-file my 2017 return and just lower my income for that year? Something else?

Thanks

Best answer by DavidD66

Arkansas does have a number of credits and adjustments, but they don' appear to have one for Claim of Right, nor do they have an "other" category. I don't see any way to take a credit or a deduction on your 2019 Arkansas return. I don't believe filing an amended return for 2018 will work, as you would not also be amending your federal return, and your federal AGI is used to determine your Arkansas taxable income.

I suggest you contact the Arkansas Department of Finance at (501) 682-1100 and consult with them.

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DavidD66Answer

Arkansas does have a number of credits and adjustments, but they don' appear to have one for Claim of Right, nor do they have an "other" category. I don't see any way to take a credit or a deduction on your 2019 Arkansas return. I don't believe filing an amended return for 2018 will work, as you would not also be amending your federal return, and your federal AGI is used to determine your Arkansas taxable income.

I suggest you contact the Arkansas Department of Finance at (501) 682-1100 and consult with them.

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DrizzlePAuthor

Ok, that's what I was thinking, but was hoping for a simpler solution (that doesn't involve calling a government agency!).

Thank you for your help! @DavidD66

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jockamo

DrizzleP...I'm having the same problem this year w/my AR taxes, did you ever get a resolution? I' haven't been able to get through via phone to the state office . Thanks in advance