My employer is issuing a W2C showing overpaid wages from 2014 that I reimbursed them in 2015. Do I need to re-file my 2014 taxes or can I get a tax deduction in 2015?

[rajatsharma123]

I had received wages in error during unpaid personal leave in 2014.  I brought this to the attention of my employer in 2015 and repaid the appropriate amount (~$6000) to them.  They are now planning to issue a W2C and also asking for my consent to file 2014 OF W-2c to obtain a FICA refund on my behalf.  Does this mean I will need to re-file my 2014 income tax return as well?  The FICA taxes are a small amount and I would just prefer to reimburse that amount to my company directly rather than go through the hassle of re-filing 2014 taxes.  Also, can I get a deduction in my 2015 tax return for the amount I repaid my company?  Appreciate any advice on this topic.

[TaxGuyBill · Accepted solution]

You shouldn't need to amend your 2014 return.

Your employer is only supposed to amend the W-2 boxes for Social Security and Medicare.  They are not supposed to amend box 1 for your taxable wages.  That means you will not need to amend your 2014 tax return.

For your 2015 tax return, you need to go through the procedures of a "repayment" to get a deduction or credit on your tax return.

https://www.irs.gov/publications/p525/ar02.html#en_US_2014_publink1000229600

[rajatsharma123]

Thanks TaxGuyBill!  Couple of clarifications -
1. Is there IRS guidance on the topic of which W-2 boxes should be updated in this scenario?
2. Is a W-2c mandatory even if I reimburse the Medicare taxes that my employer paid (it's only a nominal amount)?  Social Security isn't applicable as the paycheck in question was late in the year and I was maxed out on Social Security by that time.

[TaxGuyBill]

1.)  The W-2 instructions show what to do under "Repayments".
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/iw2w3.pdf#page=11">https://www.irs.gov/pub/irs-pdf/iw2w3.pdf#page=11...>

2.)  That is what the directions are, so that is what should be done.

[rajatsharma123]

Thanks again!  Your advice and clear guidance was really helpful!

[ravi-chauksey]

HI, what evidence do I need from employer to get a deduction or credit on your tax return in such scenario?