Repaid Sign on Bonus In Following Year - W2C Issued with Updated Box 16

[throwaway499492]

I joined a job in VA in 2021 and received a $10000 sign on bonus. In 2022, I left that job for another one and was asked to repay the sign on bonus. My company refunded the SS and Medicare taxes, meaning I only had to pay $9235 back.

They then issued me a 2021 W2C with the updated information - specifically, boxes 3, 4, 5, 6 and 16 were updated (SS wages, SS taxes withheld, Medicare wages, Medicare taxes withheld and state wages).

I've read elsewhere that the company cannot legally update box 16 and that I would have to wait until the current 2022 filing season for refund of the excess taxes paid (both federal and state) - as a result, I did not amend my 2021 taxes.

Should I still proceed with a claim of right in my 2022 taxes for federal and state income tax despite the W2C with Box 16 updated?

[KrisD15]

To clarify, when did you receive the W-2C?

It sounds like the employer transmitted your FICA based on the lower amount, so there would be no FICA tax for you to recoup. 

Did they also correct Box 1 to reflect the 9235 you paid back? If yes, use the corrected W-2 and amend your 2021 return. 

If no, then you will need to file a claim of right repayment. 

Click for more Information 

[throwaway499492]

I received the W2C sometime around June 2022. 

The strange thing is that the W2C corrects state wages (Box 16) and reduces them by $10000 but does not adjust federal wages (Box 1)