I am from a different country. So, I am new to US taxing system. I am in the following situation, please help me with clarification.
I started working in USA from Jan-2015 for a MNC ABC. I resigned from ABC after completeing all the exit formalities properly. I joined a MNC XYZ on 1st Sep 2015. But, by mistake, ABC continued to credit me salary for 2.5 months (Sep 2015, October 2015 and first half of Nov 2015). Now (Jan 2016), ABC has sent me a letter demanding me to repay the amount. I understand that it is their right to demand me to pay back the overpaid amount. But, even though the amount that got credited to me was after all the deductions (Medical, Dental & Vision Insurance, FICA (OASDI+HI), Federal Tax, State Tax), they demand me to pay back Gross - FICA (OASDI + HI). Following are my questions.
1. State Tax and Federal Tax - ABC demands me to pay them the state tax and federal tax for the overpaid amount. I read in internet that this is how the employers demands the ex-employees to repay the overpaid amount. ABC agreed to give me W2c once I pay the overpayment amount in full (with tax). Following is written in the letter sent to me by them:
"After repayment in full is received, ABC will issue a W2C for the OASDI and HINS Wage and Tax adjustment. You are entitled to deduct from income or take a credit against tax paid on your personal income tax return (Form 1040) for the amount repaid in the year in which it was repaid. Please see IRS Publication 525 for additional information."
If I pay the state tax and federal tax to ABC, will I be able to get it back from IRS by filing W2C? Please note that the 2015's W2 from ABC will be my first W2 in USA as I am new here in USA. If yes, when will I be able to get the money back, assuming that I file the W2C in March-2016?
And, If yes, will I be able to get back the 100% of the money back, provided If I do not have to pay IRS any additional tax?
2. Insurance - Why is ABC expecting me to pay the Medical, Dental & Vision insurance also? I have not used this insurance after my relieving date. I was covered under another insurance by my current employer (XYZ) for which the insurance premium is getting deducted from the pay stubs by my current employer (XYZ).
Please reply ASAP.
If abc overpaid you it is their mistake and should also be liable for your attorney's fees good luck