Repayment of Sign On Bonus

[TRW2]

I was awarded a sign-on bonus in January 2022 for $5,000 with a minimum 12-month employment clause.  I left the company in August due to an unplanned residence relocation.  Per the Agreement, I paid back in December 2022 the bonus in the amount of $4617.50 which I believe is the amount less FICA/Medicare tax already paid [NOTE: My employer determined the amount of the repayment that had to occur].  My 2022 W2 from this employer does not reflect the repayment amount and they are not going to issue a corrected W2.  Is my understanding correct that I will complete a credit for repayment in the amount of $4618 through the Claim of Rights IRC 1341 on my 2022 taxes since the award/repayment both happened in the same tax year?

[Mike9241]

since the repayment occurred in the same year as the receipt you can not use section 1341. that's only when the repayment occurs in a different year. the employer is supposed to reduce box 1 wages on the 2022 w-2 by the $5,000 

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if box 1 is not correct contact them and ask why they won't correct it. if they refuse you can tell them you'll be contacting the iRS and to expect a letter from them. 

see this link for further instructions if box 1 is not net of the $5K

[rjs]

I'm not sure what link Mike9241 meant to give you, but it's probably this one on the IRS web site.

Incorrect Form W-2

If you end up needing to file Form 4852, TurboTax will prepare it for you and include it in your tax return. You do not have to wait to get it from the IRS or use the Form 4852 that the IRS sends you.

As you may know, contacting the IRS is very difficult recently. They are severely overloaded and understaffed, but they are trying to improve. If you do contact them and they send a letter to your employer, knowing that they have caught the attention of the IRS might encourage your employer to correct the W-2. If you are unable to contact the IRS, you can still include Form 4852 in your tax return on your own.

[TRW2]

Thanks for the great advice.  This makes sense now; I have reached out to the employer again to reiterate they need to provide a corrected W2.  I'll go the 4552 route if that does not work. 

[TRW2]

Hi Everyone:

Regarding my previous question, I am getting ready to file taxes with the Form 4852 calculated in TurboTax.  My question is do I still file the incorrect W2 from the employer along with the 4852?  Turbo Tax is defaulting to the incorrect W2 even though the 4852 is showing "linked" to that W2.  The only way to have the proper tax calculated is to adjust the original W2 gross wages amount to match the 4852.  Just want to confirm that I should be updating the W2 to match the 4852 data.

[KrisD15]

If the W-2 your former employer sent you is incorrect, you should only use Form 4852. 

The IRS has a copy of the incorrect W-2 and does not need you to list that, since you are filing based on the numbers you reported on the 4852.