Receiving a bonus from my company that is contingent on staying X years, if I leave early, how much do I owe?

Hello, my company is going through a merger, and some of us are receiving a cash
bonus obviously fully taxed up front. It is only fully vested after 3 years,
and we must pay it back if we leave before that time. My question is how much do
I owe if I leave early, the full amount, or the post-tax amount that I received?
There is no language in the contract that states either way. Is there a legal
requirement?
Thank you.

Asked on April 23, 2017 under Employment Labor Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Generally, if there is no agreement to the contrary defining the exact repayment amount, you would owe the full, pre-tax or gross amount you received, since that is what was paid both to you and for you (e.g. in the form of tax payments). You would then have to make the appropriate adjustments on your own taxes, such as by filing an amended tax return for a prior year on which you were taxed on the bonus, so as to get a refund.


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