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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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My wife just received a bonus of $4000 ! ADP has withheld

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My wife just received a bonus of $4000 ! ADP has withheld 25% for federal taxes! Is this the law?

For tax withholding purposes - the bonus is treated as supplemental wages.

There are two ways to determine federal tax withholding from supplemental wages:

- flat 25% withholding, or

- to add supplemental wages to regular wages for that pay period and withhold from the combined amount.


Most companies use flat 25% withholding because it is simple and clear.

So we might guess that is what your company is using.

In case the person overpaid taxes with withholdings - the overpaid amount would be claimed as a refund on the tax return.


Let me know if you need any help.


Lev and other Tax Specialists are ready to help you