@AmeliesUncle wrote:
@eled34 wrote:
I was required to repay this bonus to my old employer at the pre-tax amount ($40,000) because I left within one year of receiving the bonus. I made this $40,000 repayment in January 2020 despite only receiving the net ~$24,000 in 2019.
That was wrong. You should NOT have repaid the Social Security and Medicare taxes. Your employer owes you that back.
I don't believe this is correct. I have certainly seen enough cases over the past 10 years to know that the most common situation is where the employer doesn't adjust or rebate the social security and medicare taxes. I don't think the situation would be as common if there was a regulation requiring the employer to make the repayment. After all, the 2019 wages were correctly taxed as actually paid in 2019.
The social security and medicare taxes can be recovered by filing form 843. The taxpayer will need a letter from the employer affirming that the employer will not be rebating the taxes themselves.
