Deferral Bonus in 2023 to Delay Starting Date to the Beginning of 2024

[swilbou]

I was scheduled to start with this company last year as my first job graduating from college.  The company offered a deferred compensation to start in the beginning of 2024.  I retrieved a 1099-Misc form with the compensation in box 3.  Do I treat this compensation as "No.  It is not an intent to earn money."?

[AmyC · Accepted solution]

A signing bonus is supposed to be reported on the w2 with your other income and is considered to be related to employment. You should answer yes, it is intent to earn money since it does have taxes due. Unfortunately, you will be paying your share plus the employer's share of Medicare and Social Security tax on the money.

You may want to contact the company and see if they can correct the situation since they are responsible for withholding taxes and clearly did not in sending you a 1099.

There is another option where you report the company and only pay your share. But as a new employee, I don't think you want to start by reporting them to the IRS.

Reference:

How Bonuses Are Taxed - TurboTax Tax Tips & Videos - Intuit