@Texas123 wrote:
If the OP received W2-c for 2022, shouldn’t the OP use that info for 2022 taxes; whether it’s an original or amended return? Any overpayment of SS or taxes will be refunded by the feds. If 2022 wages don’t align on the 2022 tax return with what’s been reported by the employer, the OP will hear from the IRS, correct?
We have overpaid SS and State tax in the past due to relocation and were refunded by both government agencies. This year we had a W-2c and I filed that along with our W-2 on turbo tax.
OP has also specified here or in a private message to me that box 3-6 were corrected but not box 1 and 2.
The employer can't change box 1 and 2. Those are the actual wages paid and actual withholding collected in 2022 and are not changed by the repayment of the bonus in a future year. The employee recovers the excess income tax on the repaid wages using the claim of right procedure which is reported on their tax return for the year in which the repayment actually happened. (The same is true for state wages and withholding in box 16 and 17.)
Social security and Medicare wages and taxes are handled separately and there are two different ways the employee can get a refund. In one case, the employer can simply refuse to make any adjustments to the W-2. In that case, the employee applies separately to the IRS for a refund, using form 843. They generally need a letter from the employer confirming that the wages were repaid and the employer will not be adjusting the social security and medicare taxes. That allows the employee to ask for an adjustment from the IRS. Or, the employer can adjust the box 3 and box 5 social security and medicare wages to reflect the wage repayment, which will result in a reduction of box 4 and box 6 social security and medicare taxes, that the employer must refund to the employee. (The employer does this by filing an amended form 941 reporting the adjusted wages and taxes and claiming a refund from the social security administration which they pass on to the employee.)
In the hybrid situation where the employer corrects box 3 and 5 but does not correct/refund box 4 and 6, the employee would apply for a refund using form 843 but again, they need a letter or statement from the employer confirming that the employer will not be refunding the excess social security and medicare taxes.
Of course, if the employee's wages after considering the repayment are more than the social security wage base ($147,000 for 2022), the employee would not get a refund of social security taxes.
