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Repayment of Vacation pay

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taxpayer50

Junior Member
What is the name of your state? KS

I used up all vacation due to me for the anniversary year in 2006. In 2007, I found a new position. I am obligated to repay unaccrued vacation pay. How do I do it? I know that W-2 for 2006 cannot be redone. How does one claim a deduction in salary for year 2006 in the 2007 tax filing. Any special forms? Can the employer deduct the amount repayed as a reduced salary in the 2007 W-2?What is the name of your state?
 


LdiJ

Senior Member
What is the name of your state? KS

I used up all vacation due to me for the anniversary year in 2006. In 2007, I found a new position. I am obligated to repay unaccrued vacation pay. How do I do it? I know that W-2 for 2006 cannot be redone. How does one claim a deduction in salary for year 2006 in the 2007 tax filing. Any special forms? Can the employer deduct the amount repayed as a reduced salary in the 2007 W-2?What is the name of your state?
What an employer would normally do, is reduce your final paycheck to take back the vacation pay. That would also reduce your W2 for 2007.
 

taxpayer50

Junior Member
But, witholding will not cover it

Unfortunately , that will not quite cover it. I still have some money left that I need to write a check. How can I adjust it in 2007 tax year. W-2 will not reflect the check I write to return some of the amount.
 

LdiJ

Senior Member
Unfortunately , that will not quite cover it. I still have some money left that I need to write a check. How can I adjust it in 2007 tax year. W-2 will not reflect the check I write to return some of the amount.
Unless you have earned less in 2007 than the total amount you have to repay, your W2 should also reflect the amount you have to pay back by check as well.
 

taxpayer50

Junior Member
Unless I have earned less in 2007? Please clarify

Hello:

I am not quite sure what that means. Since I am leaving the company, W2 from the old company will show less salary in 2007 than in 2006. Here is the hypothetical scenario

Year 2006: Total Pay (including unaccrued vacation pay of $4000) : 60000

Year 2007: Total Pay from the above company when I left: 20000

2006 W2 from company will show: 60000

2007 W2 from company will show: 20000

Returned vacation pay: $4000 (written via a check)

Are you saying that when company sends 2007 W2 in Dec 2007, they should show only $16000? If true, does the company and me have to fill in some adjustment forms? It looks like company cannot change the W2 in 2007 to show the $4000 adjustment (unless I am misunderstanding somewhere)

Thanks and looking forward to your opinion
 

LdiJ

Senior Member
Hello:

I am not quite sure what that means. Since I am leaving the company, W2 from the old company will show less salary in 2007 than in 2006. Here is the hypothetical scenario

Year 2006: Total Pay (including unaccrued vacation pay of $4000) : 60000

Year 2007: Total Pay from the above company when I left: 20000

2006 W2 from company will show: 60000

2007 W2 from company will show: 20000

Returned vacation pay: $4000 (written via a check)

Are you saying that when company sends 2007 W2 in Dec 2007, they should show only $16000? If true, does the company and me have to fill in some adjustment forms? It looks like company cannot change the W2 in 2007 to show the $4000 adjustment (unless I am misunderstanding somewhere)

Thanks and looking forward to your opinion
Yes, I am saying that the company should adjust the 2007 W2 down to reflect the salary that you repaid....OR issue a corrected W2 for 2006 to reflect the salary that you repaid (therefore allowing you to amend your 2006 return).

One way or another the company has to make an adjustment. They have to account for the 4k they are getting from you, and the only legitimate way to do that is by adjusting your pay down. No, there are no special forms for you to fill out...the company simply needs to make the adjustment. It would be easier all around for the company to make the adjustment for 2007...less paperwork for them...particularly since they will not file their first quarter's quarterly filings until April 15th.
 

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