Employee overpayment refunded the next year

[csh796]

In 2021, my employer overpaid me by $1,000-they paid me the same bonus twice by accident. I did not discover the error until early 2022, at which time the employer asked me to return $923.50 to them, which included federal, state & local taxes. They said they could only adjust the FICA taxes & I would have to amend my tax return to get a refund for the overpayment of the federal, state & local taxes. They issued me a revised W-2 form last week. I opened an amended return, plugged the new numbers into Turbo Tax and it says that I am not getting a refund. I don't understand why. It seems that I have been unfairly penalized for being honest & reporting the overpayment to them.

[Mike9241]

under the tax laws repayment must be $3,000 or more to get any tax benefit for repaying in the following year. under $3K there's no tax benefit unless you repay in the same year. 

box 1 of your taxable wages did not change.  an amended return won't change because box 1 didn't change and you really don't need to file for the change in social security and medicare taxes. basically, you got burned by your employer because you're are paying income taxes on compensation you did not get.

[csh796]

Thanks for that information, although I was just hoping I had made a mistake & not gotten screwed. I am following up with my employer to see if somehow they can make it right.

[csh796]

I told my employer HR Dept & Payroll what you said & they have agreed to refund me the difference in my next paycheck, even accounting for the taxes that would be taken out! Thanks again for the info, it really helped.