Question on income taxes

I have a basic tax question.

I have received some reward amount from my employer couple of months back. Below is my paycheck summary for that month

Salary - 4399.33
Award - 3422.25
Gross - 7568.08
Gross till that date - 58,296.66

Here is the tax break down:
Federal - 1304.69
SS Tax - 456.20
Medicare - 106
State - 486
SUI/SDI - 73.57

*-the award amount I received after taxes is ~ $1900

But there was an agreement that I have to payback the amount what I received If I quit the company and two options are given:
1. Either I write a check for $1900 to them (OR)
2. They deduct actual amount of $3422.25 before taxes in the final settlement

Somehow I believe both the options are not equal and I would be losing more money in the second option. Some how I went with option-2, here is the summary of my final pay-check:

Salary - 15322
Reward deduction - (-)3422
Gross - 11900
Gross till date - 58296

Tax breakdown:
Federal - 2595
SS Tax - 724
Medicare - 169
State - 929
SUI/SDI - 116

Did I make a mistake by choosing option-2? would I be saving some more bucks by going for option-1 or both the options are same? Please advice?

Answer:

Both the options #1 and #2 are the same; in option #1, $1,900 that you need to payback to your ER is after tax dollar after taxes withheld on the gross rewards of $3,422.25 while the gross amount of $3,422.25 that they deduct is... Read more...