Originally Posted by
waldo135
I think the IRS views PS as a ‘bonus’, which is why it is taxed at a flat rate for everyone, regardless of withholdings.
It is WITHHELD at a flat rate. My understanding is that it is taxed as ordinary income, no different than any other W2 income. All the reconciliation is done when you file your taxes. There's no separate line on the 1040 for "bonus income."
Correct me if I'm wrong.