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Wage Overpayment

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  • Wage Overpayment

    I resigned from my former employer in Nov. 2009 in NJ and re-located to MA for a new job. I expected to receive 2 post-resignation paychecks: one paycheck for my final pay period worked and one paycheck for 2 weeks of banked vacation. I had direct deposit with my former employer so did not have control of what they deposited into my bank account. I received these 2 post-resignation paychecks via direct deposit as expected. Then, in December, I received a 3rd post-resignation paycheck. I thought this may be because they paid in arrears, I wasn't sure. When I received a 4th post-resignation paycheck in late Dec, I got in touch with HR at the company and notified them of what was going on. Apparently, due to a system glitch or administrative error, my status in the HR system had not been changed from active employee to former employee. They corrected the problem and have now sent a letter requesting them that I pay them back for essentially 2 paychecks worth of gross wages (approx $10k). It should be noted that I did not have access to my post-resignation paystubs as these are only available to active employees accessing the company intranet.

    My questions are:
    1) Is former employer required to issue me a corrected W2? Even though I had already hit my maximum for social security tax earlier in the year, shouldn't my W2 be corrected for Medicare taxes?

    2) This error on their part has caused me to have to spend extra time and effort when I did nothing wrong. My taxes will now have an additional level of complication related to Claim of Right doctrine which is somewhat complicated and for which I will need to engage the servies of a professional tax accountant now, in order to ensure I recover the taxes I paid on the overpayment checks and that in general this is handled correctly. Is it reasonable/within my rights to request former employer to reimburse me for the cost of having to hire a professional tax accountant? If they did not make this error, I would've done my taxes myself, as I've always done in the past.

    Thanks for your advice!
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