In May of 2013 my company paid for my state to state relocation. I signed a re-payment agreement that obligates me to repay the amount my company spent, based on a decreasing percentage for the time I remain at the company over the course of 12 months.
The full amount of the relocation per my company is ~$83k, on my W2, the taxable amount of relocation that was added was ~$34k which includes tax gross up.
The relocation included home sale and home purchase assistance, movement of goods, and various miscellaneous expenses.
I will be leaving my company at the end of February in 2014. I will be responsible for a 25% repayment of the ~82k in the amount of $21k.
My new employer is giving me a lump sump taxable payment to cover this amount. This amount of $32k will be reported on my 2014 W2 as taxable income.
My questions are:
1) I should be able to take a tax credit under claim of right for an amount repaid on my 2014 tax return. Since I have not yet filed my 2013 Tax return can I instead deduct the repayment from that or must I wait until I file my 2014 return since the repayment will have occurred in tax year 2014?
2) How should I distribute the ~$21k repayment amount? Can I claim the entire repayment amount against the ~$34k taxable relocation added to my W2 or should I apply it to only 25% of my taxable relocation expenses since that is the percentage of total? Or should my employer provide me with an itemized statement of how they applied the repayment to expenses?
The full amount of the relocation per my company is ~$83k, on my W2, the taxable amount of relocation that was added was ~$34k which includes tax gross up.
The relocation included home sale and home purchase assistance, movement of goods, and various miscellaneous expenses.
I will be leaving my company at the end of February in 2014. I will be responsible for a 25% repayment of the ~82k in the amount of $21k.
My new employer is giving me a lump sump taxable payment to cover this amount. This amount of $32k will be reported on my 2014 W2 as taxable income.
My questions are:
1) I should be able to take a tax credit under claim of right for an amount repaid on my 2014 tax return. Since I have not yet filed my 2013 Tax return can I instead deduct the repayment from that or must I wait until I file my 2014 return since the repayment will have occurred in tax year 2014?
2) How should I distribute the ~$21k repayment amount? Can I claim the entire repayment amount against the ~$34k taxable relocation added to my W2 or should I apply it to only 25% of my taxable relocation expenses since that is the percentage of total? Or should my employer provide me with an itemized statement of how they applied the repayment to expenses?
