# Repayment of signing bonus in subsequent year



## AspiringCA (Sep 30, 2009)

Hi everyone,

I have a question that I was hoping a tax expert here could help me with.

I received a signing bonus of $10,000 that was paid in 2009 when I started working for them. The bonus was contingent upon me giving them two years of service and if I left early I would have to repay a prorated portion of it depending on how much time I gave them. I was paid the full $10,000 without any taxes, CPP, or EI deducted. The amount was included as income on my 2009 return and I paid any taxes owing on it at that time. 

I left the company in 2010 before the two year service requirement was up and I had to repay a little less than $7,500 to my former employer. Now here's the hard part, how to I account for this for tax purposes? I paid taxes on this amount in 2009 and it would have effected my RRSP contribution limit for 2010, my education credits which I still had in 2009, and most importantly - my refund. 

Can I account for this on my 2010 return somehow? Or do I have to get an amendment done to my 2009 return, get a new notice of assessment with updated figures, and THEN do my 2010 T1?


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## MikeT (Feb 16, 2010)

When I made my repayment, my accountant just made the deduction on that repayment year's return. I didn't re-file the previous years return.


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## AspiringCA (Sep 30, 2009)

Thanks Mike! 

I've thought about doing it that way, but it doesn't seem like it would be right because of the different tax rates. I made only half the amount of money I should have made in 2009 because I was in school for half the year. So I paid taxes at a lower rate. My income is double this year so my marginal tax rate is higher. If I were to deduct the bonus repayment for 2010 wouldn't I get a refund equal to my marginal tax rate this year? 

If that is the correct way of doing it then awesome, because I'll get back more taxes than I originally paid for it. But it doesn't seem like the CRA would like that for some reason


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