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Bonus payback tax question

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duckman1966

Junior Member
What is the name of your state? California

I recevied bonus of $10K in 2004 as part or relocation package. After tax withheld, I actually received $6K into my pocket. Now, I am leaving my company (2005) and I need to repay $10K back to the company.

My question is, can I get $4K tax withheld back? How should I do? Will I get $4K back while filing 2005 tax return?

Thanks in advance for any help!
 


pattytx

Senior Member
It's very possible you may be able to recoup some of the federal income tax on your 2005 1040 either as a tax credit or as a deduction, although there are certain restrictions which you will need to see your accountant or tax preparer about. Hopefully, you have the applicable pay stub. Sorry, I am well versed in employment tax requirements, not in personal taxes. Make sure you get a receipt for the repayment from the employer.

Also, you should ask your employer for a refund of the applicable Social Security (if you did not meet the wage cap, or would not have met it without using part or all of this bonus) and Medicare taxes, since they will be able to file amended returns for such refunds of your contribution, plus theirs. You will have to give them a statement that you will not seek the refund yourself, and if they give you the refund, they will also have to give you a W-2C form (corrected W-2) for 2004 showing the revised Social Security (if any difference) and Medicare wages and taxes.
 

duckman1966

Junior Member
Bonus payback question

Thank you so much, Patty.

Your advise was excellent. I talked to Payroll to get W-2C to solve this issue. Also, Publications 525 has the repayment section (page 31) explaining how this repayment can be filed to get back the tax paid previous year.

Thank you! :)
 

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