My previous employer accidentally issued me a paycheck

[Alex M]

Jurisdiction

Nevada

My previous employer sent me an additional paycheck (via direct deposit) after I left the company. Now they are requesting the money back. I am more than happy to oblige; however the amount they are requesting is the gross amount of the paycheck. Due to taxes I only received a part of of this amount. Am I obligated to pay the full amount back or just what I received after taxes?

Also am I able to request that my W-2 for the 2022 year be adjusted to reflect that I am returning the paycheck that was issued by mistake?

 

[adjusterjack]

Am I obligated to pay the full amount back or just what I received after taxes?

Yes. Keep a copy of their demand and a copy of your check for the full amount. You'll be able to make the adjustment on your tax return and get the withholding back.

Also am I able to request that my W-2 for the 2022 year be adjusted to reflect that I am returning the paycheck that was issued by mistake?

Yes, you can request it. No guarantee that you get it.

 

[Tax Counsel]

My previous employer sent me an additional paycheck (via direct deposit) after I left the company. Now they are requesting the money back. I am more than happy to oblige; however the amount they are requesting is the gross amount of the paycheck. Due to taxes I only received a part of of this amount. Am I obligated to pay the full amount back or just what I received after taxes?

Also am I able to request that my W-2 for the 2022 year be adjusted to reflect that I am returning the paycheck that was issued by mistake?

When was the actual payment made? And have you already received your W-2 and know for certain that that payment is included?

 

[Alex M]

When was the actual payment made? And have you already received your W-2 and know for certain that that payment is included?

I have not received My W2 as of yet. The amount that they are requesting I pay back is $2429 and I received a total of $1662 after taxes. It seems rather inconvenient that I would have to come out of pocket for the difference when I was not the one that made the mistake in the first place. Also this paycheck was direct deposited and I received no physical check.

I am not sure how employers handle tax withholdings, but would it be reasonable to just pay beck what I received and have them adjust their payroll expenses on their taxes to get back the difference?

EDIT: The payment was made middle of December. My previous boss was notified and I asked him what I should do. He told me to hold off on returning it because there was some contracting work that he wanted me to do. Then just this week he called and asked me to return it.

Yes. Keep a copy of their demand and a copy of your check for the full amount. You'll be able to make the adjustment on your tax return and get the withholding back.



Yes, you can request it. No guarantee that you get it.

Thank you for your response. Would they be able to write off the difference on their taxes instead? I'm not trying to take advantage of the situation I am in and short them for a paycheck that I shouldn't have received; however I did not ask for or seek out this paycheck. The error was made on their end, They were notified of the mistake, and the paycheck that I received was not spent. I am trying to be reasonable, and if necessary I will pay the full amount; however I would prefer to just return the amount that I received.

 

[Tax Counsel]

EDIT: The payment was made middle of December.

Ok, so it is clearly 2022 income had the check been good. Given that, the employer can adjust it's final quarter payroll tax returns to get it right and get a refund of over paid withholding. So all that you should have to return is the actual money (the net check) you received. Between the refunds the employer gets for the withholding and the return of your $1662 check the employer should be made whole. This assumes that there were no deductions for which you have had the benefit and would need to compensate your old employer for (e.g. deductions for certain employee benefits like life insurance, investment in 401(k) or other retirement funds, etc.

 

[Alex M]

Ok, so it is clearly 2022 income had the check been good. Given that, the employer can adjust its final quarter payroll tax returns to get it right and get a refund of over paid withholding. So all that you should have to return is the actual money (the net check) you received. Between the refunds the employer gets for the withholding and the return of your $1662 check the employer should be made whole. This assumes that there were no deductions for which you have had the benefit and would need to compensate your old employer for (e.g. deductions for certain employee benefits like life insurance, investment in 401(k) or other retirement funds, etc.

Thank you very much.