@user17710989220 wrote:
Thanks for your response. To better explain my question - I was paid a bonus in January and required to repay in July of the same year because I left early. I was required to repay the net amount of the bonus. As example I repaid 15000 of the 25000 bonus. My employer reduced my w2 wages by 15000, the net payment. No other boxes on the w2 were changed to reflect repayment. Is this correct? Or should I request my former employer correct the w2 to reduce wages by 25000 and taxes paid?
Your federal and state tax withholding was already sent to the IRS or the state and credited to your account -- what was paid was paid, and that is shown on the W-2. Because you now have less income, you may have had too much withheld, which will result in a refund.
However, regarding social security and medicare tax, that should have been adjusted by your employer. For example, suppose your wages plus bonus were $100,000 and you were required to repay $10,000. Your box 1, box 3 and box 5 taxable wages should be $90,000. (Although this is slightly more complicated because of pre-tax deductions for 401k plans, medical insurance premiums, and so on.). Box 4 (social security tax) should be 6.2% of box 3. Box 6 (medicare tax) should be 1.45% of box 5. (*Also note, if box 4 and 6 are more than $172,000, the situation is more complicated.).
If your social security and medicare tax withheld are more than 6.2% or 1.45% of the social security and medicare wages, your employer must correct that and give you a refund. There is no way to fix it on your normal tax return. There is a special form you can file to request a refund of those taxes, but you can't file that form unless you contact the employer and get their refusal to make the adjustment in writing.
If box 3 and 5 do not reflect the bonus repayment, that also must be corrected by the employer.
So start by looking at boxes 1-6, and let us know if you have any more questions.
