Quote:
Originally Posted by Chocaholic
Will make a complex situation really brief.
What is tax treatment (Fed and State) when an employee refunds compensation?
This is the result of repaying "recoverable" compensation. Long story, but received a relocation payment that was recoverable if I left within 2 years...which I did. That payment was taxed/treated exactly the same as normal income. Note: in this case, only the "net" amount was recoverable. Wrote that check back in the spring.
And...may possibly be doing the same thing again. New employer provided a signing bonus that is fully recoverable (gross amount) if I leave within 1 year. Job is a horror story, so may be doing so. Hence my inquiry.
Any thoughts? Will obviously talk with our tax guy but interested in comments from the brain-trust...which is probably sharper than my tax guy!  |
Not a tax guy, but off the top of my head I'd say you can file an amended tax return for the year(s) in which your income will be reduced by the payment of compensation and, thus, you should have a refund on the tax paid. There is a statue of limitations of three years from the date filed to get an amended refund so be aware of the time limit. You would have to file the appropriate form and a new 1040, along with supporting documents. Your tax professional should know if this is the route to take and to help with the paperwork.