A taxpayer may be able to deduct a payment made under claim of right when the repayment is more than $3,000 on Schedule A. What is a repayment under claim of right? A repayment under claim of right is when a taxpayer suffers a casualty loss and receives payment from an insurance company. A repayment under claim of right occurs when a taxpayer claimed income in a previous year they thought they had a right to, but later had to repay it. A repayment under claim of right occurs whenever a repayment of income exceeds $3,000. A repayment under claim of right is the recovery of the tax-free portion of a retiree's annuity on the retiree's final income tax return.