Question

Repaid moving bonus

Forum|Forum|3 years ago
October 3, 2022
2 replies
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In 2019 I was given a $40k moving bonus which I had to repay. I repaid $13k in 2020 and then $27k in 2021. I did not receive any W-2c from my company and when I asked for them this year, they gave me two, one that reflects the $13k repayment and the other that reflects $27k repayment. Both W-2cs only have boxes 5 and 6 corrected and not box 1. I tried amending my 2019 tax return but it does not make any sense since box 1 is not changed. What do I do in this situation? How do I claim the taxes that I paid on this $40k back.

Also, is employer supposed to repay me excess SS taxes withheld? This question came up when I manually changed box 1 to adjust for the $40k repayment and Turbo Tax said that I overpaid SS taxes.

Thank you!

Critter-3

You cannot change the W-2 form to reflect the repayment. Instead you must report the repayments in the tax years they are repaid ...

See Repayments here:

https://www.irs.gov/publications/p525/ar02.html#en_US_2014_publink1000229600

O

Opus 17

Employee

In brief, you have a "claim of right." You would take either a deduction or a credit on your 2020 return for the amount you repaid in 2020, and a deduction or credit for the amount you repaid in 2021 on your 2021 return. If you have already filed both tax returns, you must file amended tax returns to claim the credit or deduction. You will make the claim of right on both your federal and state tax returns to get the federal and state tax back.

Your W-2 does not change because it reflects what you were actually paid in 2019. You can't file an amended 2019 return because your 2019 return was correct for what actually happened in 2019.

You say you got a corrected W-2 with box 5 and 6 only changed. I assume that your total wages for the year, even after the repayment, were more than the social security maximum wage base. Did the employer actually refund you the difference in the box 6 medicare withholding?

Search for claim of right, if you need more information, post back here. You can take the deduction in Turbotax online but for the credit, you need to be using Turbotax installed on your own computer, and you need to manually determine the amount of the credit. There are several long answers on this forum about how to do it, or ask here if you can't find them.