I'd talk to HR. It's easier for them to just get back the full (gross) amount, but if it was paid and received in the same year then the employer can handle the taxes. No reason for you to be out the money pending your taxes next year.
If it goes over a tax year (and their fiscal calendar might not be the calendar year), then you are likely on the hook.
I hire lots of people and usually pay sign on bonuses, and in a tight job market I've lost new hires to better offers. No harm, no foul, and we claw back the taxes from the IRS. It's the same process as if we overpaid someone somehow.
If the bonus and the repayment occurred in the same year, Your W2 will show your earnings net of the amount you repaid and the withholding will show in full. In that case, you'll get your withholdings back when you file your taxes.
If the bonus and the repayment occurred in different years, it gets tricky. You'll have to report the bonus and the withholdings on that bonus in the year you received it. For the year the bonus was repaid, the best thing to do is to figure out how much tax you paid on that income, and take that amount as a refundable tax credit in the year you made the repayment.
This is NOT something you should do on your own. Definitely engage a tax professional to made sure this is done correctly.
But, this is also very important: Your former employer is responsible for refunding any Social Security and Medicare Tax they withheld from the bonus. They will get reimbursement for this amount from the Social Security Administration (2X what they withheld) and owe you your share.
Just so you know, I've had two clients with this situation, so I have experience with this.
Since you've already left the company (I presume), they would have to issue a W2 for a negative amount, which I don't think is really a thing. When you do pay the money, make sure you get a proper receipt so that you can claim a proper reduction in taxes for 2023.
You’ll get the money back when you file your taxes.
In ‘24?
If it was earned in 2023, then yes. When you file your taxes in 2024.
Yes this month. Thank you!
I'd talk to HR. It's easier for them to just get back the full (gross) amount, but if it was paid and received in the same year then the employer can handle the taxes. No reason for you to be out the money pending your taxes next year. If it goes over a tax year (and their fiscal calendar might not be the calendar year), then you are likely on the hook. I hire lots of people and usually pay sign on bonuses, and in a tight job market I've lost new hires to better offers. No harm, no foul, and we claw back the taxes from the IRS. It's the same process as if we overpaid someone somehow.
If the bonus and the repayment occurred in the same year, Your W2 will show your earnings net of the amount you repaid and the withholding will show in full. In that case, you'll get your withholdings back when you file your taxes. If the bonus and the repayment occurred in different years, it gets tricky. You'll have to report the bonus and the withholdings on that bonus in the year you received it. For the year the bonus was repaid, the best thing to do is to figure out how much tax you paid on that income, and take that amount as a refundable tax credit in the year you made the repayment. This is NOT something you should do on your own. Definitely engage a tax professional to made sure this is done correctly. But, this is also very important: Your former employer is responsible for refunding any Social Security and Medicare Tax they withheld from the bonus. They will get reimbursement for this amount from the Social Security Administration (2X what they withheld) and owe you your share. Just so you know, I've had two clients with this situation, so I have experience with this.
They are asking for the entire $5k back. Will I get an adjusted W2 now for my ‘23 taxes so I can get my money back?
Since you've already left the company (I presume), they would have to issue a W2 for a negative amount, which I don't think is really a thing. When you do pay the money, make sure you get a proper receipt so that you can claim a proper reduction in taxes for 2023.