Expert: Shirley McAllister, CPP, PHR - 1/13/2010

Question
My Company was sold in 2007 and an I received a letter to be paid a bonus in connection with the sale, a portion was paid at that time, and a portion was deferred until 12/31/09. I subsequently left employment and just received a net check in the mail yesterday. I sent an e-mail the last week of December listing what I thought would be the gross amount less the federal withholding and social security amounts. The check I received was the "net" amount per my e-mail to the company. However, it was on a company check and did not detail the amount withheld. Do you think the company will try to send me a 1099 for this? Even if they deducted federal withholding and social security and medicare? What do I do if they send me a 1099 for this payment and a W-2 for the time I was employed in 2009?

Answer
Even if they send a 1099 instead of a W-2 for the bonus they will still have to put the correct withheld taxes in the boxes on the 1099. You will probably not have to worry, their tax figures must match their W-2's so they will put it on a W-2 to match with their tax reports.

Shirley