Article: 50472

Overview 

If you were required to repay income in the current tax year that was previously reported and taxed on a prior year’s return, you may be eligible for a credit or deduction on your North Carolina (Form D-400) return under the Repayment of Claim of Right provision. 

To claim this benefit, you will need to complete the Repayment of Claim of Right Worksheet as part of your North Carolina tax filing. 

What Is a Repayment of Claim of Right? 

This applies when: 

• You included income in a prior year because you believed you had a right to it, and 

• In the current year, you had to repay all or part of that income, and 

• The repayment was $3,000 or more, and 

• North Carolina originally taxed the income. 

Note: Common examples include clawed-back bonuses, pension overpayments, or legal settlements repaid under court order. 

How to Report 

1. Navigate to the State Taxes section on the left-hand side of the screen. 

2. Click the link: I’d like to see the forms I’ve filled out or search for a form. 

3. In the dropdown menu, select North Carolina. 

4. Click on the General tab. 

5. Select Repayment of Claim of Right Worksheet to open the screen. 

6. Enter all applicable information.  

7. Click Save once complete. 

Additional Resources 

For further guidance, see:  

• 2024 North Carolina D-401 Individual Income Tax Instructions 
• NCDOR – Repayment of Claim of Right Information Page