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Received a corrected W2

I received a sign on bonus from my employer that I paid back in full due to leaving my contract. My corrected W2 subtracted the 10k that I paid back but only in boxes 3-6. They did not provide a corrected number for the corrected federal wages or federal income tax withheld. 

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1 Reply

Received a corrected W2

that is correct if the repayment was in a year after the income was received. you do not amend your return for the changes in 3-6. 

not sure what years are involved but here's the rule for reclaiming the income taxes you paid on the original amount which I assume was included in box 1 wages

 
for the year of repayment if the gross was $3,000 or more:

1) you can take a deduction on Schedule A line 16 the gross amount repaid and note it as iRC 1341 repayment OR 

2) recompute the taxes in the year you received the payment by excluding it from income. The decrease in taxes is taken as a credit in the year of repayment on schedule 3 line 13b

 

if less than $3,000 you can only use option 1)

 

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