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My employer aggregated the sign on bonus with regular paycheck and withheld regular income tax (37%) from the paycheck. How do I claim a tax refund for extra withholding?

I believeI I should be taxed 22% for 75000$ bonus regardless of my tax bracket (37%). My W2 shows all of my earnings and does not separate bonus from regular income. What are my options?
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3 Replies
ee-ea
Level 15

My employer aggregated the sign on bonus with regular paycheck and withheld regular income tax (37%) from the paycheck. How do I claim a tax refund for extra withholding?

My employer aggregated the sign on bonus with regular paycheck and withheld regular income tax (37%) from the paycheck. How do I claim a tax refund for extra withholding?

none.

 

My employer aggregated the sign on bonus with regular paycheck and withheld regular income tax (37%) from the paycheck. How do I claim a tax refund for extra withholding?

While your employer has the option of using a flat 25% rate for bonus withholding, that does not change your overall tax at the end of the year.  If this is a 2023 bonus, it will be included in your 2023 taxable income, your total tax is calculated on your tax return, and if your withholding is more than your tax bill, you will get a refund at that time.  If you expect to be in the 37% bracket, that's what you will owe.  If your employer had used the 25% rate for bonuses, you would have had more money now but owed tax at the end of the year (possibly including a penalty for under-withholding).  Your overall tax liability at the end of the year is exactly the same either way. 

 

There is no procedure to get a temporary refund because your employer used your regular withholding instead of the optional rate for bonuses.  

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