@rjs wrote:
In what year did you pay back the $10,000? You have to get the adjustment for the tax on your tax return for the year that you paid it back.
Further information.
There should also be a claim of right process on your state tax return, but you will have to do some research on that, if you want to adjust your state income taxes.
Lastly, we have to think about social security and Medicare tax. For a $10,000 bonus you would pay $620 of social security and $145 of Medicare tax, unless your total income was more than $137,700, which was the social security wage base for 2020. Suppose the employer asked you to repay $9235. In that case, you are whole with respect to social security and Medicare tax. However, if your employer asked you to repay the $10,000 gross, then you are owed a refund of $765 social security and Medicare tax. (Note that if your income was more than $137,700 even after considering the repayment, you didn't pay SS tax and are only entitled to a $145 medicare tax refund.)
To get that refund, you need to file form 843. You need documentation of the fact that you paid SS and medicare tax on those wages, and you need a letter from the employer confirming that the employer will not be obtaining an adjustment or refund for you. Form 843 is not supported by Turbotax and is not part of your regular tax return, you can file it at any time.
https://www.irs.gov/forms-pubs/about-form-843
