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    arun_robin's Avatar
    arun_robin Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Jun 21, 2010, 07:54 AM
    Tax rate on Sign on Bonus
    Hi,
    I work for a company in Kansas. My annual income is 58k$ and my sign on bonus is 7000$. But I received a sign on bonus check of 4900$. The federal tax withheld was 1750$ and state tax 350$. I am on my my OPT still(F1 status). Why has so much amount been withheld on tax for students? Can I clain a portion of it back?

    Also if I leave the company within a year, I have to return the joining bonus. How does this work?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jun 21, 2010, 02:32 PM
    For ANY type of bonus, there is typically a 25% withholding for federal income taxes. The state withholding depends on the state.

    You will claim the withholdings on your federal and state income tax return as reflected by the Form W-2 which you will get in January 2011.

    Now, if you leave the company and have to return the joining bonus, you will either have to get the W-2 adjusted (with Form W-2C) and amend the 2010 tax return OR have the bonus debited from your 2011 salary.
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