Hi @Opus 17 I appreciate your help so far and I am wondering if you can help me with a similar issue.
Basically, there is one more $30K bonus that was paid to me in 2022 and returned (full gross amount) to the same employer in 2023. This is more complicated as it crosses tax years. For this bonus, the employer has not made any adjustments either to the 2022 W-2 or to the 2023 W-2 and I think that's fine.
Let us call this "Bonus B" (it is still $30K).
The employer issued a letter to me stating that they have received the repayment and that they have not provided any reimbursement for the associated taxes of Bonus B nor will they file a claim on my behalf regarding this.
So, for Bonus B, I plan to do one of the following in my 2023 return:
- Option 1: take a $30K deduction on Schedule A, line 16 (Form 1040).
- Option 2: recompute my 2022 taxes as if I had not received that bonus and take the difference as tax credit for 2023 on Schedule 3, line 13b (Form 1040).
Regardless of which option I choose, I still want to file Form 843 requesting a refund explicitly for the Social Security and Medicare taxes over-collected for Bonus B. If I do that, can I still use the full $30K bonus amount in my calculations for Option 1 or 2? In other words, what I am asking is whether taking a $30K deduction (the $30K includes Medicare and Social Security) disqualifies me from filing Form 843 to seek a refund of these taxes.
