This is a crazy one but I hope someone can help point me in the right direction.
- I won a trip in 2013 and went on the trip in 2013, the company did NOT list the trip as a bonus in the tax year of 2013
- I continued to work for the company for part of 2014 but was off their payroll midyear
- The last payroll of 2014 I received an earnings statement that showed earnings that are offset by Social Security Tax, Medicare Tax and a line item under "other" that lists Tangible Bonus. The net effect is that the cash value of the check is zero but my tax liability took a huge bump.
- I also found out from people that also went on the trip and still work for the company that no one else was charged with this tax liability.
It is pretty frustrating to suddenly have this tax liability dropped on me. I agree that there should be a tax liability for the trip. I am trying to figure out what game my former employer is playing but I think that they have been classifying the trip as a "business trip" so that winners of the incentive are not taxed. Now suddenly I don't work there and they decided to reclassify only me as having won an incentive trip and therefore hit me with all the taxes.
Is it okay for them to treat me differently than the others for tax purposes? Can they do this a year after the trip was won and redeemed? Would the IRS want to know about this fuzzy business trip practice? How would I report it? Besides now understanding the new level of slime from my former employer is there anything else I should be worried about? Could they do something like this every year just to be annoying?
I really appreciate any thoughts that you have. I live in Illinois.