How to claim credit for taxes paid in a prior year on a returned signing bonus?

This is super helpful info! Quick question - do I need to get something from my former employer that documents the repayment? My HR dept wasn't very helpful when I left. Also, will tax software like TurboTax handle this calculation or is this something I need to manually figure out?

You should try to get documentation of the repayment from your former employer - ideally a receipt or letter confirming the amount and date of repayment. If they won't provide that, bank statements showing the transfer back to them can work too. Keep all documentation in case of audit. Most tax software can handle this but you may need to search specifically for "claim of right" or "repayment credit" in the help section. TurboTax should handle it, but you might need to use one of their higher-tier versions. The software will help calculate the difference in tax from the prior year, but you'll still need to manually enter some information about the repayment circumstances.

That sounds too good to be true. Does it actually work with complicated scenarios like this? I've used other tax software that completely messed up when I had anything slightly unusual.

How much does the service cost? Is it worth it compared to just paying an accountant to handle this one issue?

It absolutely works with complicated scenarios - that's actually its specialty. The AI analyzed multiple options for handling my repayment and showed which approach would save me the most money. It even flagged potential audit triggers and explained how to properly document everything. The value compared to an accountant really depends on your situation. For me, getting a quick answer without scheduling appointments or waiting for responses was worth it. Plus I learned how to handle it myself for the future. The service also covers way more than just this one issue - it helps with all kinds of tax scenarios throughout the year, not just at filing time.

How does that even work? The IRS phone system is deliberately designed to make you wait or hang up. Is this actually legit?

This sounds like a scam. There's no way to "skip the line" with the IRS. I doubt this service actually does anything other than take your money.

It's actually pretty simple - they use an automated system that navigates the IRS phone tree and waits on hold for you. When they reach a live agent, you get a call to connect with them. It's basically like having someone else wait on hold instead of you. No, it's definitely not a scam. I was super skeptical too, but it literally just handles the hold time so you don't have to sit there listening to that music for hours. You still talk directly to an actual IRS agent - Claimyr just gets you to that point faster. The service doesn't see any of your tax info or get involved in your actual conversation with the IRS.

Thanks for the advice on documentation! I've got the bank transfer statement and some emails from HR acknowledging the repayment. Should I also create my own written statement explaining the timeline and circumstances? I'm worried since they didn't issue a corrected W2.

Yes, definitely create your own written statement with the timeline and all details! Include dates, amounts, names of who you communicated with at the company, and explain why no corrected W2 was issued. The more thorough your documentation, the better. I'd also recommend printing out copies of the relevant tax code sections (IRC 1341) to include with your records. Having this level of documentation shows you did your due diligence if questions ever come up. And keep everything for at least 7 years - the IRS can go back that far in certain cases.

Good point! California has its own specific rules about this that are slightly different from federal. Check your state's tax department website for guidance.