Corrected W-2 Issue

[mpatel1000]

My wife was laid off from her  company in 2017. She was given a year's severance and as such her original W-2 included wages and federal taxes withheld for both her normal salary and the severance. However she was rehired by the same company three months later and was forced to give back that severance. She therefore received a corrected W-2 and that shows the adjusted Wages (Box 1) correctly but there is no corrected federal tax withheld figure. Using the original value for federal tax withheld gives us a MASSIVE refund. When my wife inquired with her payroll dept., they said the form is correct according to their system and that if a corrected value is not provided, to use the original.  Will this mean we get a the massive refund this year and may possible have to give it back next year? Any chance the oversight on their part is our gain considering their unwillingness to send another W-2?

[neth1]

So is the amount of the total income from the company the same as what you got and what was reported?  You say it is, so that should not be a problem.  So lets walk through the severance part of the question.  When she got paid severance, was all the withholdings taken off?  It seems you indicate there would of been withholdings.  When she paid back the severance, did she have to pay it back in whole or just the amount that was take home pay?  If the whole severence was paid back, that had withholdings on it before, then you should receive that massive refund rightfully.  If she only paid back what was take home pay, I also assume that withholdings were held at the normal levels as before, I would inquire with the payroll department as to what happened with the withholdings of the severance.  If they were refunded the withholdings, then I would ask if they could give a corrected W-2.  If they were not refunded the withholdings, I would as why they were not.  I would push to have the right thing done, because any refund that is not rightfully yours, the IRS can come back, bill you what was suppose to be theres, plus interest and penalty.