My W2C shows blanks in Boxes 1,2 and several others where the original W2 showed a dollar amount. Do I leave these blank when I file, or fill in the original W2 totals?

[froggrad98]

I was laid off from my employer in late 2016 and received a large severance package. I returned to this employer in early 2017, and had to pay back most of this package (over $15,000). It appears this was the correction in Boxes 3-6 on my W2C, but all other boxes, including 1 and 2, were filled in on the original W2 but not the W2C. I would like some guidance on how to report this.

[MiriamF]

You should fill in the original W-2 totals.

A W-2C is only supposed to report the changes to the original W-2. For any box that was reported on the original but not the corrected W-2, use the original amount.

[Gabrielagom01]

So for example I just had a corrected SSN. Do i just input pictures both of them (everything on my W2-c was left blank except that portion)? 

[DMarkM1]

Go back to the original W2 you entered and put in the corrected information from the W2C.  Any information that was unchanged you leave in from your original entries.  Be sure to select the box for "Corrected W2" in the follow on question.  

[Anonymous]

Hi there,

I have the same situation as the original poster of this thread. I repaid $10k to my employer. Only boxes 3 and 5 are filled out and reflecting this repayment. Box 1 is empty. If I do as you explain, then Turbotax shows to have updated everything for the amended return with a $0 refund for both fed and state. This makes no sense. 

If I update box 1 with the original W2 amount - the $10k I repaid, then it shows a refund of fed tax of around 20% of the $10k amount plus a 2% amount of refund for the state tax refund. This would appear to be correct. So why is box 1 blank? I repaid $10k, so therefore I did not get those wages, so why would we put the same amount of income in Box 1, as that's what the tax is calculated off of. I'm quite confused, I'm assuming my employer (same as the poster) screwed up and did not reflect the repayment in the box 1 amount. Shouldn't they have?

[DeanM15]

If you believe your employer made a mistake on the W2C, you need to get them to correct it. 

W2 and W2C data is electronically downloaded to the IRS. If the data is not updated correctly then you will receive an IRS letter after the tax season. 

[Anonymous]

Thanks for your response. However, I do not know if they made a mistake. That's why I am posting on this forum. So that someone that is knowledgeable on this topic can reply with their assessment of whether or not its a mistake or if I do not correctly understand this process. 

[samscofield11]

"I have the same situation as the original poster of this thread. I repaid $10k to my employer. Only boxes 3 and 5 are filled out and reflecting this repayment. Box 1 is empty. If I do as you explain, then Turbotax shows to have updated everything for the amended return with a $0 refund for both fed and state. This makes no sense."

I have the same situation except the amount is $40k (promotion bonus with 1 year claw back). Can someone please provide guidance on this? I received a W-2c and only boxes 3 and 5 are filled out. I originally paid taxes on the $40k (received about $25k net) and then I repaid my employer the full gross $40k when I left for another job. Box 1 should be updated to reflect the $40k repayment, right? If I use the amount from my original W-2, I am losing out on the ~$15k I paid in taxes on the $40k bonus.

UPDATE: I spoke with my former employer (for the 3rd time!) and they agree box 1 should be amended. I should receive confirmation and another updated W-2c in 1-2 weeks.

[DMarkM1]

Ok here is a post with the instructions to file a "claim of right".  Basically, you are going to figure out what the tax difference was in the year of bonus but assuming the bonus didn't happen.  Use that figure to file for a credit in the year you paid the bonus back.

You will need TurboTax desktop for the year of repayment to make this claim.  In the forms mode, go to 1040 wkst line 12D, in the the "Other Payments and Credits Smart Worksheet" box and enter the difference in the taxes paid and taxes you should have paid in the bonus year.  

You will not need to do anything with the W2C since your income amount (Box 1) didn't change on the W2.  

[CBGB]

Hi @samscofield11, 

Did this get resolved? I have the exact same problem (sign-on bonus with 1-yr claw back) with employer telling me they only need to correct boxes 3-5. Other advice on TurboTax has not been helpful for this specific issue.

[Mike9241]

assuming repayment was in a subsequent year and say the bonus you got in the first year was $10K you should have repaid $10K less the medicare and fica taxes.  on the original return, you got credit for the federal income taxes actually withheld and that has not changed since you do not file an amended return for that year. 

in year 2 you (the repayment has to be more than $3,000 to get your income taxes back) :

a) recompute the income taxes for the year you got the bonus but without including the bonus in box 1 of the W-2 

2) you take as a credit on schedule 3 line 12d denote as IRC 1341 the reduction in income taxes in year 1

how all this works - simplified

example 1

say in the bonus year there was $4,000 in federal income tax withholding and that's the taxes you owed on it 

you got a net check of $10K less $4K less Fica and Medicare taxes of $765  or $5235 (in pocket).

you repaid your employer $9235 ($10K less Fica and Medicare taxes). the return for the year of repayment will show a credit of $4000. so your net out-of-pocket is $5235 

example 2

say in the bonus year there was $4,000 in federal income tax withholding and but you only owed $3,000 in federal income taxes on it.  you got a net check of $10K less $4K less Fica and Medicare taxes of $765  or $5235 (in pocket).  the employer withheld $4K but you got $1K back from the IRS because there was over-withholding. so you are in pocket $6235.

you repaid your employer $9235 ($10K less Fica and Medicare taxes). the return for the year of repayment will show a credit of $3000. so your net out-of-pocket is $6235 

state laws differ

you are not required to take a credit in the year of repayment

you could take it s an itemized deduction on schedule A line 16 denote as IRC 1341 repayment 

[NGM65]

If someone has to repay partial sign-on bonus in a subsequent year, can credit be claimed in the same manner?

Example:  Received $15K sign-on bonus in 2020

Left company after 1 yr 1o months in 2022 and as per agreement repay 50% of sign-on bonus and repaid $7.5K  in 2022

Received W2-C with corrected amount in box 5 and 6 all other boxes are blank

Please advise

[JulieS]

Yes, you can claim a credit or deduction for the amount of the repaid bonus in the year it was paid back.

To enter your repayment information in TurboTax Online:

1. Click Federal on the left side menu.
2. Click Deductions & Credits.
3. Scroll down and click Show more to the right of Other Deductions and Credits.
4. Click Start to the right of Other Deductible Expenses.
5. Proceed through the screens until you get to the Did you have any of these less common expenses? screen.  If your repayment amount was $3,000 or less, answer Yes.  Otherwise, answer No.
6. On the next screen, Did you have any of these other expenses?, answer Yes if your repayment amount was over $3,000.
7. Report your repayment amount in the Claim of right repayment over $3,000 box, then select Continue at the bottom of the screen.
    

The W2C that you received is only correcting your Medicare wages and Medicare tax withheld. If it is for 2022 wages, you can just change the amounts for boxes 5 and 6 on the W2 screen. Leave the other entries the same as the original W2. 

1. Select Federal on the left side menu.
2. Select Wages & Income toward upper left.
   Click Edit to the right of Job (W2).
3. Click Edit to the right of your W2 entry.
4. Click Continue.
5. Make your corrections on this page.
    

If it is for an earlier year, you can amend your return for that year, but it is not likely to change your refund. Click here for help with that. 

[Bigsandy]

It is not a mistake. I have a same situation last year 2022. I am filing a tax return now an wondering how you solve the issue. Thanks!