Retention Bonus Pay Back/ taxes witheld

[SB86TX]

• 2023 bonus paid back in 2024. Company originally refused to give W2C & stated it would be reflected this year. My 2024 W2 still did not reflect the bonus pay back. After speaking to the company a W2C was submitted for 2024, subtracting the bonus from my income, but they also decreased my taxes withheld even though the taxes were withheld from my pay. So, I have over $1400 in taxes that were withheld in 2024 that are no longer reflected. The company is saying ADP has to decrease the taxes witheld because of the credit. How do I go about getting credit or refunded the $1400 that is no longer reflected? 

[AmyC]

Your employer should refund the money they took from your wages. They probably also withheld Medicare and Social Security tax that also needs to be refunded to you.

If your employer refuses to refund the monies they took from you:

• Have your paystubs as proof of the amounts actually paid (twice I have had to upload a full year of paystubs to the IRS)
• Proof of conversations with work where you tried to correct the situation
• Increase your w2 entry box 4 for the additional $1400 tax withheld.
• File your taxes.
• Wait for the IRS to contact you and then provide proof. 
• Prepare Form 843  and mail it separately with tracking - no signature. To claim the Medicare and Social Security tax.

Note: Keep records of phone calls, emails, everything related to getting this situation corrected with the employer including the payback issue.

Use IRS Form 843: Claim for Refund and Request for Abatement and Form 843 Instructions to prepare.

Social Security and Medicare Tax states:

Refund of taxes withheld in error

If Social Security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund.

If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Attach the following items to Form 843:

• A copy of your Form W-2 to prove the amount of Social Security and Medicare taxes withheld,
• A copy of the page from your passport showing the visa stamp,
• A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or that you authorized your employer to claim. If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer.