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S-CORP how to request refund of employer portion of excess social security tax withholding refund

Hi,

I have a temporary W-2 JOB (Primary JOB with different employer). It maxed out to SSA cap $147,000.00 and both employee/employer taxes withheld to max. Now I have my own S-Corp which I work for my self on project based (seasonal job). I pay myself salary. Since I maxed out SSA withholding from my Primary JOB employer, do I still needs to withhold social security tax for my S-corp?  I know employee excess social security will be refunded. But How can I get S-corp employer portion excess social security tax? Or should I not withhold Social Security Tax for S-corp?

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4 Replies
AliciaP1
Expert Alumni

S-CORP how to request refund of employer portion of excess social security tax withholding refund

Your S-Corp is not eligible for any refund since it did not pay a maxed salary and it is required to continue to withhold and match the social security tax until you reach the capped salary from the S-Corp.  The cap applies to one person's salary, so the 2 separate businesses each treat the amount they pay you as a separate person's salary.  From the business's perspective, you are one person to your primary job and a completely different person to your S-Corp.  From your perspective, you are one person that hit the cap and will get your excess withholding refunded on your personal tax return.

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S-CORP how to request refund of employer portion of excess social security tax withholding refund

Hi Alicia,

   Thanks for the info. So whatever my S-corp withholds, I will not get refunded and it is gone(loss for me). And In case of 1099 with two jobs for two employers will be refunded to the independent contractor right. Why the same law not applied here. Since I am the owner as well as employee and Social Security is based on the SSN. And I did not with hold the FICA taxes as I already know I maxed out. Do I get any letter? How Can I avoid double payment of Social Security on Employer portion?

ThomasM125
Expert Alumni

S-CORP how to request refund of employer portion of excess social security tax withholding refund

I'm not sure what you mean regarding a letter. You will get refunded your social security tax withheld by the S Corporation, but not the portion the company pays. Instead of filing as an S Corporation, you could file the business return as an LLC (single member LLC on schedule C or multi member LLC on partnership form 1065) and you would avoid the social security tax altogether on your excess earnings. 

 

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S-CORP how to request refund of employer portion of excess social security tax withholding refund


@gousecris wrote:

Hi Alicia,

   Thanks for the info. So whatever my S-corp withholds, I will not get refunded and it is gone(loss for me). And In case of 1099 with two jobs for two employers will be refunded to the independent contractor right. Why the same law not applied here. Since I am the owner as well as employee and Social Security is based on the SSN. And I did not with hold the FICA taxes as I already know I maxed out. Do I get any letter? How Can I avoid double payment of Social Security on Employer portion?


You don't avoid the double payment, because you made yourself an S-corp.

 

If you were a sole proprietor with 2 different jobs and 2 schedule Cs for two different types of business activities, those business are treated as disregarded entities.  You and the businesses are legally the same thing.  If each business has a net profit of $100,000 and your total net profit is $200,000, you only pay SE tax on the first $147K because you and the businesses are legally the same.

 

That changes completely if your business is an S-corp.  An S-corp is a separately and distinct legal entity from the owners, even if there is only one own.  The S-corp follows all the tax laws for corporations, not individuals.  Under the tax law, if you work for corporation A and receive $100,000 of wages and $100,000 of wages from corporation B, both corporations are required to withhold the full employee share of social security and both corporations are required to pay the full matching share of social security.  Then when you file your tax return, you can claim a refund of the excess social security that represents your share, but the employer share from company A and B goes into the government coffers and neither A nor B is entitled to a partial refund.  This is true even if you are the owner of corporation B.  

 

You would avoid this if your self-employment business was a disregarded entity under schedule C.  You decided to make it an S-corp, this is one of the disadvantages of doing that. 

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