My spouse's employer (a school system!) claims they overpaid her last year as they misclassified her rate. They want her to return money. Assuming she still wants to work for them, how could this work tax-wise if she agrees to repay the money? We've already filed last years taxes.
Employer claims they overpaid last year and want money back
byu/seabornman intax
Posted by seabornman
2 Comments
You would request a right of claim tax credit on your 2026 tax return.
This is called a “claim of right repayment”, and if it was over $3000, she’ll claim it either as a credit or as a deduction on her 2026 return. If it’s a repayment of less than $3000, then she’s out of luck and doesn’t get any tax benefit for it. [More info in Publication 525](https://www.irs.gov/publications/p525#en_US_2025_publink1000229601).