I received a sign-on bonus when I joined a Company with the stipulation that if I left before 1 year I was under obligation to repay the sign on bonus
The amount was 40,000 but after taxes I only received around 23000.
I have decided to leave the company after 4 months. This will still be within the same tax year.
My question is: Am I obligated to write a check for the complete 40000 (and how would I recuperate the taxes that were withheld?) or for the 23000 I actually received?
Thanks

Hello mv:

You received the benefit of the entire $40k, therefore you'll need to pay the entire $40k back. If this results in an overpayment of your federal income tax, then you'll be able to get that back. Same thing with the state. I don't know about SS and FICA.

But, the payments to SS and FICA benefit YOU too, even if you can't get back the immediate payment.

excon

I agree with excon - you repay the entire $40K. It should then show up on your tax return as some sort of loss. Make sure your accountant knows about it.