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wmtsang
Level 4
March 6, 2021
Question

Is settlement penalty paid by an employee to employer tax deductible for the employee?

  • March 6, 2021
  • 4 replies
  • 20 views

The employee left early and had to pay $20k approx as settlement. Can it be deductible towards employee's taxes?

This topic has been closed for replies.

4 replies

itonewbie
itonewbie
Level 15
March 6, 2021

Is this based on a clawback provision for incentive, relocation, or similar payments?  If so, you can consider claim of right.

---------------------------------------------------------------------------------Still an AllStar
    IRonMaN
    IRonMaN
    Level 15
    March 6, 2021

    Good answer.  But are we taking bets on whether or not the next question is "how do you deduct claim of right"?😁

    Slava Ukraini!
      itonewbie
      itonewbie
      Level 15
      March 6, 2021

      Hmmm... is getting a fish now better or knowing how to fish?  But they also say a bird in the hand is worth two in the bush...  Life is full of difficult choices...

      ---------------------------------------------------------------------------------Still an AllStar
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