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

    Oct 9, 2007, 01:30 PM
    Bonus repayment
    A person is paying back to us their hire bonus in monthly installments over the next 5 years. We set up a note receivable and are collecting interest. My assumption is this person should not get any W2 adjustments. Am I correct?

    By the way, your previous answers to bonus questions were very helpful. Thanks
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Oct 12, 2007, 09:24 AM
    Thanks for the compliment! No pressure, but a tip would be nice! :-)

    If he is paying you back under a note with interest being paid, the bonus has effectively been converted to a loan. The interest is income to your company.

    In my opinion, no W-2 adjustment is needed.
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