The employer wasnt trying to avoid taxes, just wanted to give a gift to their employees. There must be a way to put it on the W2 where the company does pay the medicare and ss portion due from the bonus, and the employees have it added to their box 1 earnings as gross. They may get less of a return because the taxes are due on it, or it may not affect their return at all depending on how big the bonus is. Ive seen it put in box 14 over and over and over again without consequence, so now what?
