@koursaros
I think we are not understanding each other.
Let's assume first that it is correct for box 1, 3 and 5 to be the same for your job. That means you have no items on your pay stub that are excluded from taxable income but included in social security wages. Such items include elective contributions to a 401k or other workplace plan, or contributions to an FSA or HSA, or certain other employee benefits. If you don't have those kinds of items, then it would be a normal situation for box 1, 3 and 5 to be the same.
Now, suppose your gross wages were $60,000 plus the bonus, and you repaid the bonus in the same year it was paid. It is correct for the company to put the net amount ($60,000) in box 1 and box 16. The box 2 and box 17 withholding should be reported as whatever was actually withheld from your pay, without adjustment. That way, you get a refund on your tax return based on the fact that your withholding was more than the tax you owe on your reduced/net ($60,000) wages.
Regarding boxes 3-6, presumably, the company withheld taxes every week or whatever, as if your wages were $90,000 -- that is, your box 4 tax would be $5580 and your box 6 tax would be $1305. That's what they reported on their monthly or quarterly reports to the IRA on form 941, and that's what your pay stubs will add up to.
At this point, the company has two options.
A. They issue a W-2 showing box 4 and box 6 wages of $60,000 (net) and corrected withholding of $3720 and $870. They must also file amended form 941 that corrects your SS and Medicare withholding. (If they don't, then the year-end total on their 941s doesn't add up to their year-end total on their W-2s.) Because they are reporting less withholding than they actually took, and because they got a refund when they amended their 941s, they must refund you the difference ($2295 in this example).
B. The company can issue a W-2 with $60,000 in box 1 and box 16, but $90,000 in box 3 and box 5. This is perfectly acceptable, there is no requirement that boxes 1, 3 and 5 must match, it depends on the employee's particular circumstances. In this case, the $90,000 figure in box 3 and 5 will match the $5580 and $1305 in boxes 4 and 6, and will match your pay stubs. And in this case, your pay stubs, your W-2, and your account at the social security administration will all match, and the year-end total on their 941s will add up to their year-end total on their W-2s. Then, you file form 843 including proof that you repaid $30,000 of wages, that the company adjusted your box 1 and box 16 taxable income but did not reduce your box 3 and box 5 income. Therefore, you are overwithheld on boxes 4 and 6, and since the company refuses to issue a refund, you are requesting it from the IRS.
That's the two way's it is supposed to work.
If they refuse to do A or B, then you have a legal claim against them and you should contact your state wage regulator. You can still apply for a refund on form 843, but you will need to make a very detailed and clear explanation with lots of proof.
