Proof of repayment if applying for credit for bonus repayment

[shubham-123]

I repayed some part of bonus to my employer as I left the job before 1 year. I am planning to apply for the tax credit for that. The employer didn't provided me the W-2C form and hence I am thinking to calculate the credit based on my calculations as mentioned here.  I understand while filing the tax return, I don't need to have proof of payment right. 

But in case, IRS audit this and ask for proof, is proof as wire transfer/ACH transfer to employer and some amount deducted from my last paycheck is good enough to prove that or should I request any other document from employer?

[ThomasM125]

The payment itself may not be sufficient to prove the purpose of it. You should have some documentation from your employer spelling out the conditions of the bonus and why you needed to pay it back.

[shubham-123]

Thanks for your reply. 

So, some part of bonus, they deducted it from last paycheck, so it is showing in the payslip. Other part, I did the ACH transfer and received a receipt that they received it. 

For condition about bonus repayment, it was mentioned in my offer letter of that company. 

Does these 3 things good enough as a proof?

[Mike9241]

just an FYI on a w-2C for the year you got the bonus the only thing that would change is the FICA and Medicare taxes and wages boxes 3 through 6. you do not amend for this so not receiving a W-2C is not a big deal. the wages box 1 don't change since they are correct for that year. nor is the repayment reflected on the W-2 wages box 1 for the year repaid.  

[shubham-123]

Thanks for your reply. 

But if Wages in box 1 in the amended W2-C doesn't change/reduce, how does option 1 here will be used? I think if someone would receive W2-C, then wages in box 1, 3 and 5  should change. Isn't it?

[shubham-123]

@ThomasM125 Can you please help with my above question? Thanks. 

[DaveF1006]

If you are audited, submit as much proof as needed. The IRS loves documentation which include statements and paper trails as needed such as as wire transfer/ACH transfer to employer and the amount deducted from your last paycheck.  Also, you should make a detailed statement regarding the repayment you made to your employer while mentioning the wire transfer/ACH transfer to your employer and other relevant information that details your repayment. 

Initially, you do not need to send in proof of your repayment when you submit your return.

@shubham-123