If an overpaid employee does not pay the employer back in the same year, should the employer give the employee a new Form W-2 showing less wages and taxes for that year?

Author: Alice Gilman

No. If overpaid wages are not paid back in the same year in which the overpayment was made, the employer must initiate a wage repayment plan that is predicated on the fact that the overpayment and the repayment were made in different calendar years. For example, if an employee who is paid semimonthly quits after the employer's December holiday break and pays back the overpayment in January with wages paid in the prior year, the employer should not give the employee a new Form W-2, Wage and Tax Statement, showing less wages and taxes for that prior year.