I retired in 2010 and have been collecting Social Security since 2012. My former employer had an incentive program whereby bonuses were paid out based upon estimated contract fee. However, there were contract disputes following my retirement, and completion of the contract, that were not resolved until recently. Once final reconciliation did occur, the company amended the previous bonus payout, whereupon I received an additional amount from the company. The company withheld FICA-SS and FICA-Med taxes from the final check.
Is that FICA withholding refundable or deductible in any way, or is it required, since the bonus is likely considered "earned income"?
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No, the FICA would have been correctly withheld from your bonus even though it's been delayed for years. The nature of the payment is considered to be compensation which is subject to Social Security and Medicare taxes.
No, the FICA would have been correctly withheld from your bonus even though it's been delayed for years. The nature of the payment is considered to be compensation which is subject to Social Security and Medicare taxes.
Thanks for clearing that up! Case closed!
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