How do I calculate the Claim of Right Repayment Credit?
To calculate the credit:
In 2025, Sam repaid $3,100 of unemployment compensation that was included in his 2023 income under claim of right. Subtracting the $3,100 from Sam's 2023 taxable income reduced his 2023 tax from the $1050 reported on his 2023 federal tax return to $700. So, Sam can claim a credit of $350 (1050 - 700) on his 2025 federal tax return.
- Recalculate your tax from the prior year without including the income that was repaid in 2025.
- Subtract your recalculated prior year tax from the tax shown on your prior year federal tax return. This is the amount of your repayment credit.
In 2025, Sam repaid $3,100 of unemployment compensation that was included in his 2023 income under claim of right. Subtracting the $3,100 from Sam's 2023 taxable income reduced his 2023 tax from the $1050 reported on his 2023 federal tax return to $700. So, Sam can claim a credit of $350 (1050 - 700) on his 2025 federal tax return.
