I received my signing bonus when I was still in college in the UK. I am not a US citizen, and did not hold an US visa at the point when I was in school and received the bonus. My employer originally paid the bonus to me as non-taxable wages but are looking to withhold additional taxes associated with my signing bonus to catch up.
Is this right? Is there any way to argue that my signing bonus should have retained its status as non-taxable wages given that I had no visa whatsoever when it was paid?
Thank you.
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@soph02 , having read through your post, need the following bits of info.:
(a) When was this "signing bonus " paid ( actual date ) and by whom ( a US entity / local branch thereof or an UK entity) ?
(b) Are you currently employed in the US on work visa or what ? If in the USA, when did you enter and with which visa ?
(c) Are you married ( and if so to whom -- US national/ GreenCard / Resident for Tax Purposes etc. OR to Non-Resident Alien )?
(d) Were you taxed by UK on this "Bonus" ? And if not , why i.e. how did you recognize the income on UK return ( for the UK tax year ending on March 31st. 2024 ) ?
I will circle back once I hear from you --yes ?
Are they asking to withhold medicare and social security taxes, or also income taxes.
They should not be withholding additional income taxes, because whatever income tax you pay or not is determined on your tax return, and if they did over-withhold income tax, you would get it back as a refund.
But, I can see them trying to withhold social security and medicare tax, because the bonus was "compensation" for work performed, even though it was paid in advance. Whether you are properly subject to those taxes is outside my competency, so we need to wait for @pk .
I will suggest, however, that if the employer does withhold social security and medicare tax (they don't accept any argument you can offer that you are exempt with regards to the bonus), you can attempt to request a refund by filing form 843. This is separate from your tax return and not included with Turbotax, you would have to prepare it by hand and file by mail.
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