I recieved a bonus less taxes in jan, 2015 and I had to repay the entire amount back in jan,2016. How do I file taxes now? My company is not giving me a w2c.
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dswamina
New Member

I recieved a bonus less taxes in jan, 2015 and I had to repay the entire amount back in jan,2016. How do I file taxes now? My company is not giving me a w2c.

 
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DDollar
New Member

I recieved a bonus less taxes in jan, 2015 and I had to repay the entire amount back in jan,2016. How do I file taxes now? My company is not giving me a w2c.

There is either a credit or a deduction for the repayment of your sign-on bonus for the amount you repaid during 2016. However, if the bonus was both received and repaid during the year, you should contact your former employer to correct your W-2.

If your repayment was more than $3,000, there are two possible ways of doing the calculation. 

Method 1 is to take a deduction, which is the simplest method but may not get you the full benefit.

To calculate the repayment as a deduction, (Method 1):
  • Federal taxes - Deductions & Credits - Check for More Tax Breaks - Other Deductions & Credits - Show more - Other Deductible Expenses
  • When you get to the screen that shows Less Common Expenses, click No
  • The next screen will have Any Other Deductions? at the top.  Please answer YES to "Did you have any other deductions that are not subject to the 2% limitation?"
  • Please enter the amount you repaid under, "Claim of Right Repayment (Only if over $3,000).

To explore the more complex (but probably more beneficial) method of calculating the credit, please refer to IRS Publication 525 (https://www.irs.gov/pub/irs-pdf/p525.pdf)

NOTE: If you choose to follow the more complex route and use the credit:
For repayments of less than $3,000:
  • Federal taxes - Deductions & Credits - Check for More Tax Breaks - Other Deductions & Credits - Show more - Other Deductible Expenses
  • When you get to the screen that shows Less Common Expenses, click Yes
  • Enter a description and amount that you repaid; click Continue

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