This is for tax year 2021 and the situation is as follow:
1. Worked for 3 companies:
- Company A
- Company B
- Company C
2. Received two W2:
- Company A and B: same W2 because they use the same PEO. The PEO combined the social security withheld from A and B.
- Company C: not using PEO.
3. Excess social security withheld:
- W2 for Company A and B (through the PEO): let's say the excess is $1000
- W2 for Company C: normal amount withheld (let's say $500) because Company C doesn't know how much social security tax I have previously paid.
Typically, Turbotax just add the excess ($1000 + $500 = $1,500) automatically in Schedule 3-Line 11 as a credit.
However, this is what happened:
- After entering BOTH W2, TurboTax said I can get credit for the excess social security.
- Clicked "Continue"
- The next page TurboTax said "You may be due a refund from your employer" and told me to:
- Get W2C from the PEO
- Get refund for the excess social security the PEO
So at first TurboTax said I can get a credit, but the very next page it said I cannot and have to get W2C. I have TurboTax downloaded software and I manually looked at Schedule 3 Line 11 and it only show $500 (Company C) and not $1,500 (Company A and B plus Company C)
This is different than IRS Topic 608, which stated:
If you had more than one employer and too much Social Security tax .. withheld, you may be able to claim the excess as a credit against your income tax on your income tax return. Refer to “Excess Social Security and Tier 1 RRTA Tax Withheld” in the Instructions for Form 1040 (and Form 1040-SR) for more information.
I have 2 W2 forms, which show I worked for more than one employer, so I am not sure why TurboTax is telling me to get W2 and refund from the PEO
Is this a bug or there is some IRS ruling that I am unaware of?
Do I just manually have to edit the form and then e-file through Turbotax?
