Repayment and W2c

[imagineer]

Hello,

In 2019, I repaid a sign-on bonus that I received in 2018.  The bonus in 2018 was $2,500.  My former employer had me repay $2,308.75.  This was the bonus minus social security and medicare withholding.  I received a W2c with boxes 3,4,5,6 updated.  IRS publication 525 has information on what to do for filing taxes for the year of repayment when repayment is over $3,000.  I am unclear on what to do when repayment was less.  Do I amend my 2018 filing minus the repayment amount?

[CatinaT1]

Yes, it sounds like you will need to file a 2018 amendment and replace the original W2 with the corrected W2, the W2C.

• You will need to print and mail the amendment.  
• Allow 8-12 weeks for processing.

See this TurboTax FAQ for help with amending.

You can check the status of your amended return here, but allow 3 weeks after filing for it to show up.

[imagineer]

Hi Catina,

I followed the amend instructions on TurboTax web app, and the refund calculator stayed at $0.  My W2c was blank for box 1.  When I use the original box 1, my box 1 is higher than box 3 & 5.  I tried to leave box 1 blank like it is on my W2c but the TurboTax web app would not let me continue without filling in information.  If my eligible social security/medicare wages decreased, wouldn't the 2018 AGI and tax burden decrease?  I thought I'd get refunded the taxes I paid on the bonus.

Thank you

[CatinaT1]

Some employers only put the corrected boxes on the W2C.  You should have something in box 1-6, maybe something in box 12 and then your state information at the bottom.  Use the numbers from the original W2 where they are blank on the W2C.  Then you should have something in all those boxes.

[dinoposta]

Hi,

Thank you for your help. I have the same situation as imagineer. Do you have to amend 2018 return if you've received a 2018 W-2C?

[dinoposta]

Correction on the above. My repayment was more than $3,000. Can I use TurboTax to claim credit for it on 2019 tax return?

[JamesG1]

This TurboTax Best answer addresses a repayment of over $3,000.

There are two options, but the right of claim credit is more attractive to taxpayers since itemizing deductions is available to fewer taxpayers after the implementation of the Tax Cuts and Jobs Act of 2017.

• Determine your tax on the previous tax year when the refunded amount was reported as income. 
• Then recompute that same tax return without the income that was repaid. 
• That dollar amount difference is the amount of the credit on the current year tax return.

Make sure that you retain copies of the previous year tax returns should you have to prove your calculations to the IRS at a later time.

[dinoposta]

Thank you for your help. Just to confirm, regardless of which option I pick I wouldn't have to actually send an amended return for my 2018 taxes. correct?

[DavidD66]

Correct, you do not file an amended return for either option.